A UNITED NATIONS SPONSORED CEASE-FIRE IN SOUTH VIETNAM IS NEEDED NOW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000200150044-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: December 29, 2004
• Sequence Number: 44
• Publication Date: June 3, 1964
• Content Type: OPEN

1964 Approved Foe 2-6tOfttlat'QW00200150044-4 2155
s ud nt of political Scienee?
wfitlin a tethele e 4-j- ts aetletoeipt eaii g n ih Of our Gov-
: jeurniiLlatieVth,neWk;Pfilace-61-tafnorteiceth' ,cThamrid-
public discussion. rioe:pdriods, of his-
tory &eine a,
As the Majority leader has said so bril-
hli4anvetivy,ittrlime:teaf4,41reilttletlailonaiitt y7itthheenflmoeer, we
Supremearea
Court heshe _ , .,? fits.
en aonA
of constitutronal and civil rig vv
Mr. President, as proud as I am to be
a citffen of Minnesota, I am prouder to
be a citizen of the United States of Amer-
ica. The citizenship that really makes
one a citizen, the citizenship that spells
out the significance of the word "citi-
zen," is to be a citizen of the Republic of
the United States of America.
That is exactly what the Constitution
provided for. Titles I, II, III, IV, and
VII of the bill provide for court orders
have witnessed the executive 'branch to protect citizenship rights. If the court Title IV conceins desegrega e
race, their religion, their ethnic origin,
their national origin, or their color.
We are going to strike that down just
as we would any cancer in our midst.
This is a cancer that we can cure. But
we cannot deny the doctor?who is the
court?the tools to do the job. The tool
to do the job is the court decree. To
deny the use of that tool to perform the
task would make a mockery out of the
court.
t d
. doing its duty. Now the time has arrived finds that these rights have been vio- schools. Ten years ago, the court or-
'for the legislative branch to do its duty. lated and by appropriate court order di- dered desegregation with due and delib-
But the legialative branch will not do its rects that those rights be sustained, and erate speed. We have had patience.
duty if it does not give to the courts the if a citizen or a public official refuses to We need more patience. I believe in
power to enforce their decrees?decrees obey that order, and if the court should patience. The older I become, the more
that are based upon the "application of be denied the right to enforce the order, I realize the importance of patience.
the law which we intend to write into the there will be no law in the United States. But, I believe in persevering patience.
Civil Rights Act. ' We will have committed a fraud on the I believe that patience should not be a
I know' of nothing that' would American people and upon the whole substitute for paralysis. Patience does
- tear down the structure of law and Of constitutional -structure. If the court not mean indifference. Patience does
government by law more than denying should be unable to enforce its orders, not mean inaction. It means progress.
the conrts of this country the right to then I predict that there will be blood It does not mean revolutionary progress,
protect themielves arid' to 'enforce their in the streets and violence in the country. necessarily, but it does mean evolution-
orders and deereeg., ' " ?If ever there was a time for this Na- ary progress.
We seek thank basic rights in this leg- 'tion to have respect for law and order, Title IV provides help for those who
islation. Among others; we seek to pro- that time is now. Too many people wish to move a little more speedily in the
tect the right of a citizen to vote. The throughout America are taking things field of desegregation. We offer assist-
evidence is replete that hundreds' of into their own hands. Some of them are ance to those who seek to be good Amen-
thousands of our citiZens have been de- doing it in the name of civil rights. Some cans and to abide by the Constitution.
nied the right tii Vote throfigh-Cap'ricious` of them are doing it to deny civil rights. Title V, of course, concerns the Civil
attion, through oPeri-dis6Vediefice of the They are both wrong. When mobs roam Rights Commission. This is essentially
law, through violations of statutes, Fed- the streets, when people are afraid to go a renewal of the Commission for 4
eral, local, 'and State,. and through de- to the aid of a helpless person who has additional years.
fiance of the. Constitution. been attacked and beaten, there is some- Title VI relates to the use of public
Any nation that parades throughout thing wrong in America. funds. We have written into it every
the world Eis the leader of free nations Congress should examine what it is do- precaution and safeguard that I could
' and freeman slioneepill,, its olo-i house ing about these great problems. Wheth- think of, or that anyone else could think
In order. et- it can do all that needs to be done, I of. The only ether thing left would be
There is ,no doubt that the tonstitu- do not know; but I know that we can- to declare that Federal funds should be
Mil. states - unequivocally in the 14th . not justify doing nothing, used in a discriminatory way.
am,enclinent, that no State may deny a The truth is that there was a time in That I do not advocate. That is un-
citizen of the United States life, liberty, history when people could be forgiven, constitutional. That is illegal. That is
_ , . . _ _ _ ..
or property 'without due' process of law, ?for they knew not what they were doing. un-American. It is unjustified.
_ and that no State may deny' the equal The Scriptures state it much more sue- Thus, we say about title VI that funds
rotection Of the laws Or deny to such cintly: ' shall be collected from the American
, _ .
citizens the privileges and imniithities-of Forgive them; for they know not what taxpayer without regard to race, and
the law. they do. that those funds shall be used for the
Yet the same young man 'who is in -American citizen, without regard to race.
But we do know what we are doing, It is that simple. We use every possible
-, Vietnam this afternoon?and there are and we do know what we are not doing.
hundreds of Negro. young men there, We cannot, like Pilate, wash our hands means to seek observance of the law
coming froth States all through this Re- of the problem. We have a job to do in
We know what the record rather than enforcement of the law.
'
public?Wli6 Wears in ' the unifor of the the Senate. That is the whole emphasis in the sub-
'U.S. Army, 'who has the insignia, of his of the court is. We know what the prec- stitute measure. I shall discuss the sub-
rank on his shoulders, who sieO.Ps' in the edent of the court is. We _know what stitute measure tomorrow or Friday, be-
same barracks with his white brother, the tradition of the court is. We know cause I am very proud of it.
We have protected not only States
who eats in the same messhall with his what it take,s to enforce a court ordex,
_ , ,
'white brother, o to the same
, , , who can g We know what happens in every coun-
recreation facilities with his White try when the courts are openly defied.
-- brother, when he returns 'home and takes Then there is, nothing left but the rule
off his utm, May Very well walk into of the dictator, or the rule of the mob.
. a ,h9t4l,a,h be told, "This If Am
, -hotel for God spare erica from either of those
, *bites onlY. Vci-bal lor-you.- "No room plagues.
In this inn. Title III relates to publicfacilities.it
That ?is a violation of, his, constitii- is incredible that anyone in America
_Mal right. That is not a violation of would ever'assert that a person, because
some, little ceurily commissiener s order. of his race, could not go into a public
It 's iortiOn of the 'Su rethe -laW Of n 1z' - lc h' h 'd f b th
rights in the substitute measure, but we
have also enlisted States powers, States
responsibilities, and States authority to
take care of the constitutional rights of
the citizens of the States. We have tried
to recognize that civil rights must ulti-
mately be protected at the community
level.
However, in title IV, all Senators know
that when the Federal income tax form
goes out from the Internal Revenue
the laud' 'ehd we are going to do same- public and therefore owned by the pub- Service, the short form or the long form,
thing about t lie What would Senators think if there there is nothing In it which says, This
to iri
do soethirig about it, in gas'a sign outside the main entrance to form is for Negroes--you pay less. This
title II of thebill. We provide *n i title II the Capitol?wlaich_is a public building? form is for whites?you pay more. This
- for the use of ,local and state enforcer- Which said "Whites only enter here form is for a Catholic. This form is for,
ment machinery. We pro-Vide that that Negroes use the basement door." We a Protestant. This form is for a Jew.
, shall be the. primary means of enforce- Would be ashamed of ourselves. Oh, no, Mr. President, the American
.
merit If the local and State govern- _Vet it is a fact that Many people in people are sent but one form and it di-
inentsrefuge to fulfill their obligations America have been denied access to pub.- 'Tots, ``Pay, pay, -,1,4,V." Not only that,
-under the Constitution Of %Elul I lie factittle-eeteel bUnt eitilgode ?sra--,er eilue service may
States, the Federal FlrigNiet chC, e tasKyagVillilaiwa. -Aake sure we pay
something to do about it. name of the public?because of their the correct amount.
121
Sol
Approved 41103,?tans2sCIMAnaViiti9E6gRAHR000200150044-4
When a Negro is taken to court, the
judge does not say, "Well, you know, we
have been discriminating against you for
200 years, so we are not going to give
you a really hard penalty here. You
have been denied equal justice for so
long that we are going to make up for
It now and let you get off free." We ex-
pect them to face up to their responsi-
bilities.
Title VII is the fair employment prac-
tices title, which is drastically modified,
The Senator from Pennsylvania [Mr.
CLARK] will speak on that today. This
title may ultimately require some court
order.
If it -does, court orders must be en-
forceable.
I must say, in all candor, that we have
taken title VII and rewritten it, be-
lieving that the prime responsibility for
action and enforcement is at the State
and local level, recognizing that this is
not the fast approach, recognizing that
this is a concession?and I would be the
last to say that it was not?and recog-
nizing that in a sense we have weakened
the bill. However, if the court is to be
brought into this matter, we should make
sure that the court can enforce its or-
ders. I wish to make sure that the judge
Is not a tyrant. I wish to make sure that
he uses just penalties. I also wish to
make sure that he protects the dignity of
his court.
There are 11 titles in the bill which
relate to various powers. The first seven
titles are most significant. Every one of
the principal titles is predicated upon the
rule of law, not on the rule of bureauc-
racy. Inasmuch as we speak so often in
this Chamber of the rule of law. I would
suggest that we also provide the courts
with the power to maintain their dignity
and authority.
If we do otherwise, we shall not only
weaken the basic structure of law in
America, but we shall also destroy one
branch of our Government, the judicial
branch.
I hope that that will not be the case.
Mr. GRUENING. Mr. President, be-
fore speaking on another subject. I con-
gratulate the distinguished Senator from
Minnesota on a magnificent speech.
It goes to the heart of the problem and
deserves the close attention of all those
who are concerned with justice and fair
treatment of all our citizens regardless of
race, creed or color. He has made a great
contribution to this cause. I commend
i
him highly and join him in the ex4
ressiOn
of his sentiments. _
A UNITED NATIONS SPONSORED
CEASE-FIRE IN SOUTH VIETNAM
IS NEEDED NOW
Mr. GRUENING. Mr. President, a
United Nations sponsored cease-fire in
South Vietnam is needed now. In fact
It is long past due.
It is becoming increasingly evident to
more and more people in the United
States?as well as to our allies around
the globe?that the undeclared war in
South Vietnam into which the United
States has needlessly injected itself, can
conference table. It cannot and will not
be settled by military might.
If that is the case?and the cold assess-
ment of the facts can only lead to that
conclusion?then the sooner the United
States takes the initiative in the United
Nations to obtain a cease-fire in South
Vietnam the better our international
posture will be. We should take every
step possible to stop the bloody, senseless
killing in Vietnam not only of U.S. fight-
ing men but of Vietnamese as well.
On Monday, June 1, 1964, the Wash-
ington Post and Times Herald editorial-
ized that the United States should take a
"middle course." It stated:
The notion of negotiated withdrawal
ignores the vital fact that the United States
and its allies would be forced to negotiate
from weakness. What cannot be taken on
the battlefield can hardly be claimed at the
conference table. If American military en-
trance into the region was a mistake a de-
cade ago, it is a reality now. Commitments
have been given to allies and friends on the
basis of that mistake and those commitments
must be upheld. ? ? ? Washingtor must
show enough resolve and force to convince
its friends and dependents that it will not
abandon them when the going gets rough,
and to convince its adversaries that per-
sistence in aggression Is fruitless and possibly
deadly.
I ask unanimous consent that this edi-
torial from the Washington Post and
Times Herald of June 1, 1964, be printed
In full in the RECORD at the conclusion of
my remarks.
The PRESIDING OFFICER. Without
objection, it is so ordered.
(See exhibit 1.)
Mr. GRUENING. Mr. President, the
editorial expresses an attitude of unwill-
ingness to face up to the hard facts of
reality. Admitting that the issues in
South Vietnam will ultimately have to be
settled at the conference table, the edi-
torial would, nevertheless, advocate the
needless sacrifice of thousands of Ameri-
can lives on the battlefield to strengthen
our hand at the conference table.
A river of blood from the bodies of
American fighting men is not needed to
convince our "adversaries that persis-
tence in aggression is fruitless and possi-
bly deadly." The military might of the
United States does not need to prove
itself by the needless loss of the lives of
thousands of its fighting men nor by the
incineration of villages by napalm bomb-
ings and the killing of their helpless in-
habitants. Our might is well known.
We need not use it to prove that we have
it. That is-the basic reason for building
our deterrent strength.
The New York Times adopts a similar
position editorially, saying in its May 29
Issue:
As we have stated here before, the prelude
to a peaceful settlement through negotiation
of the Communist aggression in southeast
Asia may have to be a temporary increase
instead of diminution of American military
participation. The ultimate goal must be
to get our troops out of the area: to achieve
conditions that will make this possible, it
may be necessary first to put more in.
In other words, we have got to kill a
lot more American boys as well as Viet-
June 3
lars before we do what we know we will
have to do ultimately.
What utter folly.
I ask unanimous consent that this edi-
torial from the New York Times appear-
ing in its May 29, 1964, issue, entitled
"Our Credibility in Laos," be printed at
the conclusion of my remarks.
The PRESIDING OFFICER. Without
objection, it is so ordered.
(See exhibit 2.),
Mr. GRUENING. Mr. President, a
more realistic view of the situation in
South Vietnam was taken last week by
the noted columnist, Walter Lippmann.
I ask unanimous consent that Mr.
Lippmann's column in the Washington
Post and Times Herald for May 28, 1964,
be printed in full at the conclusion of my
remarks.
The PRESIDING OrtoICER. Without
objection, it is so ordered.
(See exhibit 3.)
Mr. GRUENING. Mr. Lippmann
stated:
The military commitment in southeast
Asia has been a mistake.
On March 10, 1964, in a speech on the
Senate floor, I stated:
This is a fight which is not our fight into
which we should not have gotten in the first
place. The time to get out is now before the
further loss of American lives.
I went on to say in that speech:
President Johnson. let me repeat, inherited
this mess. It was not of his making. As
he approaches the difficult task of making
the necessarily hard decisions with respect to
the problems in South Vietnam, problems
created long before he was President, he
should feel no compunction to act in such a
way as to justify past actions, past decisions,
and past mistakes. He should feel entirely
free to act in such a manner and to make
such decisions as are calculated best to serve
the interests of the United States and the
tree world?a world changed greatly from
the time President Eisenhower and Secretary
Dulles initiated our southeast Asia policies.
Mr. Lippmann in his realistic column
states:
The ILS. Government helped to pick Diem
as chief of South Vietnam and, until the
coup of last autumn, Diem and his family
were supported by us as the rulers of South
Vietnam and they became the clients ar the
United States.
In my speech in the Senate on March
10, I stated:
In October 1955, the Eisenhower admin-
istration picked Ngo Dinh Diem to rule
South Vietnam.
There may be some room for disagreement
as to whether Diem was a poor choice for
the Job to begin with or whether, after hav-
ing come to power, the thirst for more and
more power on his part and on the part of
his many relatives, whom he placed in high
governmental posts, became insatiable.
In a nationwide broadcast on March 8,
1955, Secretary Dulles said:
"I was much impressed by Prime Minister
Diem. He is a true patriot, dedicated to in-
dependence and to the enjoyment by his
people of political and religious freedoms.
He now has a program for agricultural re-
form. If it is effectively executed, it will
both assist in the resettlement of the ref-
ugees and provide his country with a sounder
agricultural system. I am convinced that his
and will ultimately be settled only?at the . namesealitfeml5tn:w.)
Approved-I-or Neiease zu C Ni141315e6g646Wondkin%Rae 411' which the
-
-
1811T6,
1 9 64
'
, giving to help to create an them irrevocable, but now the discussion is
efficien%
t, al' military?flaree? and, sounder in terms of extreme and final clecisione,
etVaitt1109114htfiniS , _ , _In, thikatinMphere of either-or, two polar
p6sitions have been staked out; they glare at
jpmann went 9-11: to each other across the daily clutter of corn-
1p1, rnorep?ver,that ifan International munlques and battle reports, forcing them-
trii.dpre,banjogirealeroke:Whiehe,is guar- selves upon us all, One position is that
eed ,hy the
_ Soviet Union, the United Ar)atricari military intervention in southeast
Asia -7(2.4 a ip1gtg that_shOlad . be ?recOg`
that Northcyietnam win,tend to. go Moist, nized and liquidated by means of an inter-
that is to say, to remain Communist but not naticalei conference, The other position is
Chinese ,* to create a visible guarantee that ?the 'United States should stick to its
which makes it safe M. Vuuel pp; to ke, as_ guns and carry the war to Communist lands,
, it has always striven not to be, a Chinese in, risky but reasonable expectation of mc-
satellite.
- - 'The decisiveness ofboth'of these solutions
Mr. LipPmann's point canna he too
is extremely appealing but both, in our opin-
3trOngly reiterated. The fact ton often ion, are illusory and misleading. The notion
OV6r100k84is that When the Vietriainese of., negotiated withdrawal ignores the vital
speak of cOlonialism they mean Chinese fact that the United States andalijv
its
. ,
as ivell,
,French ,enionigh_sin? I-4yipg Would be forced to negotiate from weakness.
been ruled ,oyer 2,000 years by the Chi- What cannot be taken on the battlefield can
flop, the people of North and Sputh hardly be claimed at the conference table.
If American military entrance into the re-
Vietnam are not about to pit their necks
gion was a mistake a decade ago, it is a real-
-into the 4Pose of comval-IMPt ,C:11140- ity now. Commitments have been given to
Neither are the Vietpaineae-7-prth. or allies and friends on the basis of that mis-
B01.1t11--41.790 to agree to white .4oming- take and ?those commitments must .be --up-
tion of their country. held.
Since my remarks heflOor(21gie ' It is Oa) wrong,- we think, to threaten
Senate on _March 1,6? 1964,-I have re- blockading or bombing of North Vietnam in
StAtes order to compel Hanoi to call off its forces
peatediy stated that the United
, in South Vietnam and Laos. This course
must stop this senseless killing in South might bring instead a longer, deeper, dirt-
-Vietnam aud take the matter to the con- ler and more uncertain war. Doubtless
ference table. American planes could interdict or decimate
"II commend_Mr. LiPpmann for his stand North Vietnanci_betWeen _breaktastand lunch
in now, supporting that ppiition.: Doubtless, too, the insurgents in South Viet-
Today am proposing that the Uz:litOgl. nam would aontinue their fight with greater
States take ,th,e, Jr4f0:01Le-ill, _1244ging bitterness. It could also happen that Com-
4/101.1t, through the United Nations, an munist China would enter the war broad-
ening it to a scope that would make today's
IffUnediate pease fire in Sonth-Viet110411. troubles look like small beer.
This is the ,Only logical and realistic ac- If the United States is neither to negotiate
tion for the united States to take, , an exit from southeast Asia nor to scare off
The issues in South Vietnajn,will have the aggressors by raiding their homeland,
,to e iwoky_eciAt_tho, ceigerenge? Wale, what is it to do? The answer, obviougy, is
Stlek.PPPAIMPe CM,beaktrallged, in between. Washington must show enough
resolve and force to convince its friends and
dependents that it will not abandon them
when the going gets rough, and to convince
its adversaries that persistence in aggression
is fruitless and possibly deadly. At the same
time the United States must show a willing-
ness to give relief and perhaps reward to
those Communists who demonstrate their
interest in living at peace with their coun-
trymen and neighbors.
Such a policy of unconditional reliability
to friends and cOnditional relief "to, e1l5nlieS
does not, of course, guarantee that American
interests in Asia will be satisfied. It is not
even a policy in the sense that a specific
path of action is thereby prescribed. Many
paths will have to be tried, political and
diplomatic, economic and military. All will
be uphill; many will be dead end. In Thai-
land, requests for aid must be answered un-
make apy sen.se to continUe.to Jose
Ainerican lives ip south Vietnam?
On March 19, 1964, I urged:
The President should tau steps to disen-
gage the United states immediately from
' this engagement.
All ourngitary should immediately be re-
iIeved of cow?4,ap,signments. All military
dependents should he ,returneg home at
once. A retiu ,the troops to our own
shores ehoUl
iipcal toda y that suggestion,
-Since rily_reipark_a011._Marob.10, 1964,
MY mail ha? heell 10.0.te Linfavornf the
"ODa.P.cl Ulan Iaisell,A.Centinile.S to flow
in support thereof, agic...11110.111Mous
efonsent tha3 _a few Of the.5.0 letterS, rep-
resentative _pf American public opinion,
be printed at the conclusion of MY re-
12157
.Assistant Secretary of State William Bundy
ha$ Said Without exaggeration that there is a
"real danger" of a Communist takeover in
the area. At the same time it was announced
in Washington yesterday that Secretary Rusk
and other top officials are to meet in Hawaii
next week to discuss the possibilities. It
seems clear that to do no more now than is
being done means, at the least, the loss of
Laos to the Communist Pathet Lao.
The credibility of the United States
determination to act tough as well as talk
tough is being eroded. None of the inde-
pendent nations of southeast Asia will stay
With what they believe to be a losing side.
They are not going to choose between West
and East, democracy and communism; they
are going to join whichever side they are con-
vinced is winning.
While nobody is going to win, Washing-
ton's problem at the moment is to demon-
strate that we are, at least, not going to lose,
or leave our allies in the lurch. This does
not mean that the talking and exchange of
notes should stop. A 14-nation meeting,
preferably in Geneva, possibly in Vientiane
but certainly not in Cambodia as the Chinese
propose, is still the best method for negotia-
tion.
The Johnson administration has wisely re-
jected an open-ended, all-out military in-
volvement in Laos that could suck the United
States into another always-increasing burden
like that in Vietnam. There are other less
drastic but still effective ways by which the
United States can show its determination
forcibly to prevent the Pathet Lao from get-
ting control of the rest of Laos. The im-
portant thing is to make this determina-
tion clear.
Ac we have stated here before, the prel-
ude to a peaceful settlement through
negotiation of the Communist aggression in
southeast Asia may have to be a temporary
increase instead of diminution of American
military participation. The ultimate goal
must be to get our troops out of the area;
to achieve conditions that will make this
possible, it may be necessary first to put more
in.
--
EXIUBIT 3
[From the Washington (D.C.) Post,
May 28, 1964]
OUR COMMITMENT IN VIETNAM
(By Walter Lippmann)
It is fair enough to say, as Senator DIRKSEN
did this week, that our policy in southeast
Asia has been indecisive. Indeed it has
been. The reason for this indecision, which
has existed under three Presidents, Eisen-
hower, Kennedy, and Johnson, is not that all
three Presidents have been weak and waver-
ing men. It is that since we allowed our-
selves to become entangled in southeast Asia,
there has been no good solution available
which any of the three Presidents felt he
equivocally. In Laos, Cambodia, efforts could be decisive about.
Marks.
? must be made to apply poultices of interna- After the French were defeated in 1954,
" The PRE&IPINO OFFICER, Without South Vietnam, the critical arena, the over- the decision of Secretary Dulles to treat
tional guarantees, however poorly stuck. In our cardinal mistake in southeast Asia a
objection, it is so ordered.
_ , whelming emphasis must be on measures South Vietnam, which is an artificial creation
(See exhibit 4.) that will give the people confidence in non- and not really a national state at all, as
" EXI-ttBrr 1 , - Communist yule. - ? -44...American protectorate and as an outpost
[From the Washing= (D.C.) Post, June 1 There is nothing to cheer about in this of the West. The Eisenhower aciministra-
,
nurse of limited means and pragmatic ma- tion, directed in this matter by Secretary
Dulles, did not oppose, but it refused to sup-
port, the settlement of Vietnam which was
worked out at the first Geneva Conference
in 1954. The U.S. Government helped to pick
Diem as chief of South Vietnam and, until
the coup of last autumn, Diem and his
family were supported by us as the rulers of
South Vietnam and they became the clients
of the United States.
This put us in an inherently untenable
position. It committed the United States
le one,slyill and in the jungles
ftQa$-M1440e41.1argest nation in
?ileuver. But it is more consonant with Amer-
MID= cot7.1tsz loan responsibilities and interests in south-
The.situation in Sinitheast. Asia _appears east Asia than the extremes of expanding
BO dismal wig unpromising that the tempta- or negotiating an end to the war.
tion is strong to seek A Anal solution to it.
Indeed, there is widely evident,a feeling that EXHIBIT 2
we are approaching a watershed, perhaps a
[Prow the New York Times, May 29, 1,964]
Waterloo, and that the Vnitecl States will
no longer be permitted by events or enemies OUR CREDIBILITY IN LAOS
to KLIICICUP _AS it has in. the past. Previously The deteriorating situation in southeast
the ,discussion of_ American policy in that Asia in general and in Laos in particular 19
fragile Asia.11 _corner has been Conducted in forcing a stronger response from the United to a stru
terms of ha,rci but s WPM- ReJttatIt 2005/01/05 : CIA-RDP66B004031R
12158
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Asia. In spite of the endless official assur-
ances of how the struggle was being won.
there has never been a time when a military
victory, or anything like a military victory.
has been possible. Even if one of the Presi-
dents had been willing to intervene with an
American army on the scale of Korea, even
if he had unleashed the Air Force, no
acceptable or tolerable mitcome was visible.
For, once the American troops were engaged,
there would be no way of withdrawing. The
territory they had occupied would be re-
occupied by the Asian multitude who would
be more fiercely determined than ever to do
away with the presence of the Western white
man.
There has never been any other way out of
the dead-end street in southeast Asia except
to make a political agreement to construct
International machinery, and to exert what
influence we can by underwriting them.
President Kennedy made a fragmentary at-
tempt to do this. He tried it in Laos, but
he allowed himself to remain entangled in
South Vietnam, and he was drawn into an
ever enlarging, continually unsuccessful, mil-
itary struggle which has no visible end.
To those who think, as I do, that the mili-
tary commitment in southeast Asia has been
a mistake, the question now is how to dis-
charge the commitment honorably and to
disengage stiffly. The basic principle is, I
think, quite clear. We must look for a solu-
tion, not by expanding the war but, by tak-
ing it to the conference table, whether to a
reconvened Geneva conference or to the
United Nations or both. The proposal to ex-
pand the war by bombing North Vietnam and
China requires, if we stop pretending that
the South Vietnamese pilots are capable of
carrying out such an attack, a declaration of
war against North Vietnam and China by the
Congress of the United States. We cannot
make war on North Vietnam by Executive
order.
No man living can possibly know what
such a war Would precipitate, or what the
Soviet Union would do since it is still the
ally of China. Burkhat we can be sure of
Is that to go to war with China about South
Vietnam would be so reckless an act as to
damage deeply our influence throughout the
world. It would be no less unpopular in the
United States.
It is not easy for any country to repair
Its mistakes, especially those in which It
has invested lives, money, and moral judg-
ments. But the original mistake in south-
east Asia has to be repaired. The *ay to
do this is to go to a conference. The chances
of its being successful are not brilliant.
But at least we shall not be alone and, even
if the prospects of a confirence are not
brilliant, the military outlook in South
Vietnam is dismal beyond words.
I have been asked whether a negotiated
settlement for southeast Asia means that
as soon as our troops are withdrawn from
Saigon, the North Vietnamese and the Chi-
nese will move in. The honest answer to
this question is, I believe, that if this can
be prevented for a few years, then there will
be a chance that It will not happen at all.
Although I realize that in the long run
southeast Asia is bound to lie within the
Chinese sphere of influence?as Chiang Kai-
shek has always insisted?I think it may be
possible to prevent any sudden and overt
occupation of southeast Asia. It may be
feasible to make It too dangerous, and not
worthwhile in comparison with the prospects
of access to the economic resources of south-
east Asia and beyond.
I think, moreover, that if an international
structure can be created, one which is guar-
anteed by the Soviet Union, the United
States, France, Great Britain, and China,
that North Vietnam will tend to go Titoist;
bomb Hanoi but to create a visible guaran-
tee which makes it safe for Hanoi not to
be, as It has always striven not to be, a
Chinese satellite.'
EXHIBIT 4
A PEW Or THE LETTERS RECEIVED SY SE ',MVOS
CISTIZNING ON HIS STAND ON VIETNAM
From Dr. Carmine Chamberlin, MD., in
Gresham, Oreg.: "I greatly appreciate and
agree with your policy that our troops should
be withdrawn from Vietnam. As with in-
dividuals it is a great nation that will ad-
mit a mistake, which this cruel and long war
in this tiny nation certainly is."
From Mr. Bob Factor. of Madison, Wis.:
"The admission of Alaska as a sister State
into the Union will prove beneficial t( only
for the infusion of courage and clear-
sightedness that has been added, in the'per-
son of yourself, to our Senate. Your posi-
tion on the war in Vietnam has turned a dull
and dreary monolog?on how many of our
citizens are to be casualties and how many
of our dollars are to be wasted?into a gen-
uine dialog on the issue of U.S. participation
at any level, economic or military, in a war
that appears to be an effort on the part of
the Vietnamese people to rid themselves of
oppression. Whether that oppression be in
the person of French generals, a tyrannical
family, or native generals let us hope that
It will never be in the person of Americans."
From Mr. Stanley E. Weisberger, of Oneon-
ta. N.Y.:
"I salute you on your statement concern-
ing our policy in South Vietnam. Quite apart
from any consideration as to the potential
benefit to U.S. short- or long-run interests
that might result from a withdrawal of our
military support and direction of General
Khanh's war against the Vietcong, is the
categorical imperative of insisting on moral-
ity and reason in Government conduct. Of
course, the greater the immorality. and un-
reason, the more urgent the imperative.
"To put it another way, Senator, I believe
our country is characterized by two attitudes:
One is a callous unconcern for Virtually any-
thing that doesn't touch Immediate inter-
ests; the other is a "we're doing God's work
here" kind of sanctimonious arrogance. One
runs up against both in trying to appeal, as
you have, to the very opposite of these pos-
tures. So it's hardly surprising when your
remarks and those of Senator Moaxe. on a
subject of the first importance, get the silent
treatment from most of the news media.
"All the same, there seems to be a growing
uneasiness over the running of foreign pol-
icy. It may just be (one may as well be
optimistic) that we're on the edge of an awa-
kening. However, it is, you spoke well and
courageously, Mr. Gatrzrenve. I fully share
your view that we should never have inter-
vened as we did in South Vietnam, and we
should pull out forthwith. There can be
no "strategic" justification for using napalm
bombs on Vietnamese villages and propping
up "governments" that practice murder and
torture as a matter of course. -It's a grand
feeling to be proud of one's councry and
one's government. I'm proud that voices
counseling decency are still heard in the
Senate, even if by only a few. Please persist
in this worthwhile cause, Senator. There
Is no alternative."
From Mr. and Mrs. Joseph N. Kabklen, of
Tonalea, Ariz.:
"We wholeheartedly support you and we
know many of our fellow Americans share
your convictions, that the fight in South
Vietnam can be won only by Vietnamese
themselves. They need to make greater sac-
rifices and assume broader responsibility in
a struggle that is legitimately theirs. We
further agree that this is a fight that is not
June 3
"We do hope that President Johnson will
give the crucial situation in South Vietnam
his immediate attention. Many parents are
looking to him to take the necessary action
that will bring our boys back to tilt; country.
"We share with other parents much anx-
iety and concern over the safety of their sons
who are assigned to military duty in South
Vietnam. Our youngest son Archie Is serving
in a helicopter unit. He was hit by a shrap-
nel in the face last December and, thank God,
it was not too serious. He did not want us
to know that he came close to getting killed;
we learned about it from a letter he wrote
recently to his brother. We worry about him
constantly."
From Mrs. Eleanor Belser, of Los Angeles,
Calif.: "Although I do not reside in your
State, I would like to express my support for
your position on South Vietnam. It is essen-
tial that we stop this shameful, wasteful war
and negotiate for peace there."
From Mr. Homer D. Smith, of Homer.
Alaska:
"In your newsletter (1964 No. 10) I read
Mr. Sturdborg's report of your and Senator
Mosinee remarks on our fiasco in South Viet-
nam. That takes moral courage--in the
face of certain castigation by the radicals?
but I, and most of the people I know, are
with you; although without your leadership
our timidity thus far has restrained us from
saying so.
"The treasure we are pouring into South
Vietnam could be used for the development
of our last frontier?our State of Alaska?
and to wage the war on poverty. Nothing is
so hard fer those who abound in wealth as
to conceive how others can be in want.
There can be no democratic rationalization
of the conditions that produce a family in-
come in one State equal to three times that
of another. Poverty is not so much the lack
of ability as it is the bounty of opportunity,
e.g., when one happens to live in an area
favored by a disproportional share of de-
fense spending; or to be a member of a
restrictive union which is several rungs
higher on an inflation ladder than other
workers.
"When I contemplate our people in
Alaskan agriculture, many waging an un-
equal battle, lacking in research, devoid of
rural access roads, competing for survival
with wasteful and prodigal public spending,'
It seems to me that it is no wonder that
only the most dedicated continue the effort.
"And last but not least, I want to assure
you that most of us support the adminis-
tration's moves to halt this disgraceful
inflation?which if not brought under con-
trol will lead to ultimate disaster."
From Miss Virginia Colter, of Dunbarton,
N.H.:
"I have just maw learned of your mag-
nificent speech of March 10 on the Viet-
namese situation and I agree with you
heartily. I have been writing and discussing
this issue for over a year and it's tough to
fight ignorance. I Just wrote a scorching
letter to the State Department suggesting
they ought to consult with you and inform
themselves and the President better. I had
received some material from them that I con-
sidered completely inane.
"We need men of courage and decent con-
viction if we are ever to get out of our
present mess. I am convinced the people will
follow decent leadership, but the news must
reach them."
From Mr. George Pappas, of Sea Cliff, N.Y.:
"Your efforts on behalf of a sane foreign
policy in southeast Asia are greatly appre-
ciated. What a great misfortune would be-
fall the American people in the event of an
escalation of the war in Vietnam. We do
not realize the risks involved in our policies.
Do we really have the support of the South
that lath say, to re Communist but our fight and we need to get our young men Vietnamese people?
not Chinese. What peove?1t For Re leasei2005001%405Prn 0192FaRDPODB0040WMOOPPO4Verville, of Hunter
real interests in southeast Asia is not to American lives are lost.. taken the liberty
_ i?f ;bringing to the personal attention of
' Honker A.. jack, exeCtitiVe director, National
Cenimittee ft.-P."4,-86:11e Nuclear Policy, the
,Urgeney of giVing-the widest distribution to
yoUr -exeellent sPeeth of March 10. I have
, read the text in full, and congratulate you
axle* upon your- forthrightliess, courage,
and high statesmanship: I feel especially
encouraged by your expression of determina-
tion to keep up the fight to get us out of
this untenable position.' Your stand should
be known to all Americans; it will put heart
in them. I have cbrainini-cated the same
strong recorrimendation - to ' Officials of ? the
Women's League for Peace, whom I know
- ,
;personally." ?
Frprei a_.?privatef first class, in the Army:
"I em, glad to sed that at least one Sen-
?? Sior is aware of the wasteful situation in
'BOutti Vit?m. hope that you and your
? Colleagues Will'alscitake note of other areas
' in the world that are in the very same situa-.
' tion.
"You have pointed out the case in South
',Vietnam and Cambodia, among other Asiatic
countries; now what is to be done about it?
Will it take many more wasteful years be-
fore our aid is reduced or better adminis-
tered? Hi4'1C.-iiirkieS it takethese obvious
facts to sink info the"heads' a our leaders?
We seem- tO? he afraid of *hat these tiny
countries will think or say about us, not the
Immediate damage being done, such as the
? 1(1)0 plus dead American met in South Viet-
.'
Prompt and firrn'action is needed. Please
do your best."
' Froin Mr. and 'Nis. Victor Povirk, of
? Mattapari, Maas::
"Wc are taking this occasion to congrat-
, .ulate,you for the valiant fight you are wag-
ing to have our troops Withdrawn from
$Outh_ Vietnam,
?. "The' inilhons of dollars leOffahly' 'wasted
In bolatering a decadent riding class in that
? bleeding country-- &Add- be" put to mud'
better use In 'rehy.ifiding ,your own State.
_ "The disturbing 'thing of oure-Edilfriued
?
involvement in South Vietnerri is the danger
of extending the conflict to the north and
-
eVentually China.
'PM' Armed Forces must be withdrawn
to insure peace. We have also Written our
? Senators about our attitude. We Support
you and Senator ydilf-fight In
the U.S. Senate on this issue."
From Mr. F. W. Stover, president arid
editor U.S. Farm News, 'Of bes Moines,
Iowa. . . ,
"It. s ?mos heartening
- "
to find a U.S.
,Senator, frOm a State supported by many
war Contracts, putting up your -kind of
battle for getting_ out of Vietnam.
"This is roost .aSenreellY the time -in his-
? tory, when, if the Majority do-irOt' have the
will to avert war then the intelligent minor-
-ity must tale the 'bull by the horns." It
has now reached a point in the U.S.A. where
the people cannot get the war theY want, if
indeed the popularity hounds are willing to
ettle for such an expediency.
"The ,she4r_Madkess:?:6f Men Id places
inuSt. try the couragecif Men-like yourself.
-But your cause is so righteous and so im-
portant that somehow I think yolf will get
thrprigh to the people Of the United States.
Surely the people do not want their Children's
lives given up on the ruins Of an atomic war.
The flirtation with niiele,ar war-by_ adven-
turous riiilifonairePlafi'eli' adMeNainata-innst
be stopped: i'Vfore than- arintleiltOie?a id-at
gltake."
- ,Prem 4Vfagdalena, "r. Gale, legislative
chairman f the?
If would seem 'impossible for us "td win
such a war. Every thinking person should
realize it is a civil war and none of our busi-
ness."
From Mrs. Mildred Miller, of the Bronx,
N.Y.:
- "At this time, when the war L South Viet-
nam is being escalated by U.S. uilitary and
financial aid, youi :tand favoring withdrawal
of troops and milt" ---'advisers, reevaluation
of Asian policy and infe.'-ning the public on
policy, clarifies the situat. 'n and points up
what needs to be done.
"Our' continued participation, which has
never been admitted as actual military aid,
is making us accessory to unspeakable bru-
tality toward the civilian population. It
cannot make friends for us in southeast Asia,
and can only result in dragging us into fur-
ther military adventures. The French had
to inflict 'and suffer catastrophic losses be-
fore they pulled out, and we should learn
from their experience."
From Mrs. Ida G. Klingsberg, of Phila-
delphia, Pa.:
"Following is a copy of a letter sent to
President Johnson:
"'There have been reports recently in the
news of plans to carry the war into North
Vietnam. These reports are most disturbing
to people who are seriously concerned for
the survival of our civilization, and possibly
of our entire planet.
"'At best such a move can result only in
a war of attrition like the one experienced
by France at an immeasurable cost in lives
and money. At worst it can escalate into
a full-scale nuclear conflagration?and the
end of everything.
"'I urge upon you, Mr. President, to take
the necessary steps leading to international
agreement on the neutralization of southeast
"
00150044-4' 12159
,
'for -ilisaster-connected urban renewal
projects where necessary. This author-
ity would substantially implement the
State's recovery program where as the
attorney general pointed out "State and
local contributive funds simply cannot
be raised on a 75-25 basis."
The second amendment would reduce
the rate of interest on any loans made by
the U.S. Government to Alaska to a rate
lower than 3% percent. This amend-
ment would enable Alaska to -meet and
best a decline in gross tax collections
caused by the earthquake damage. As
Attorney General Hayes illustrated, dif-
ferences in interest rates mean millions
of dollars.
Alaska, for example, if charged 3.625
per annum for $25 million for 40 years
to meet disaster losses only would pay
$18,578.095 plus principal. An interest
rate of 2 percent on the same amount
under the same terms with no deferment
of principal payment would cost the State
$10,250,000 plus principal. The differ-
ence, better than $8 million, is con-
siderable.
A rate such as the United Sates gave
Chile after its earthquake would be even
better and wholly logical. In that case,
after a grant of $20 million, the United
States made a loan of $100 million with
merely a service charge of three-fourths
of 1 percent and deferment of payment
of the principal for 10 years. Why not
rovide the same treatment for our fellow
citizens?
Attorney General Hayes has provided
the committee with tables illustrating
the startling differences in costs on loans
where interest rates differ.
The amendments proposed by the at-
torney general are constructive. They
will strengthen the bill as will others
which will be offered in committee.
Because his statement is important as
the Senate and the other body consider
legislation to enable Alaska to rebuild
and because such rebuilding is, we be-
lieve, "a wise and prudent investment
on the part of the United States," I ask
unanimous consent that the full text of
the , attorney general's statement be
printed in the RECORD.
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
STATEMENT OF GEORGE N. HAYES, ATTORNEY
GENERAL OF ALASKA, BEFORE THE SENATE
INTERIOR AND INSULAR AFFAIRS COMMITTEE
My name is George Hayes. I am attorney
general for the State of Alaska. I am ap-
pearing here in behalf of Gov. William A.
Egan, of Alaska, and also in behalf of Senator
GRUENING, Senator BARTLETT, and Represent-
ative RIVERS of Alaska.
Mr. Chairman, Governor Egan desires that
I present to you his gratitude and apprecia-
tion for the efforts of the Congress and the
President in behalf of the State of Alaska
and its citizens. The financial, physical, and
moral assistance already given our State is
considerable. The assistance that is being
proposed in this bill you are considering will
enable us to recover from the effects of the
earthquake sooner than most of us believed
possible just 2 months ago.
?This omnibus bill represents only a part
of the time-consuming and productive ef-
forts of Senator ANDERSON and the Federal
Commission for the Reconstruction and De-
elo ment of Alaska. For this the State
02004500444 and our congress-
THE ACTION PROPOSED AND
NEEDED FOR ALASKA'S EARTH-
QUAKE VICTIMS
Mr. GRUENING. Mr. President, Alas-
ka's able attorney general, Mr. George
Hayes, appeared before the Senate In-
terior and ImUlar Affairs Committee this
morning to present testimony on S. 2881
which amends the Alaska Omnibus Act
to provide assistance to help the State
recover from the effects of the March
27 earthquake and subsequent seismic
waves.
Attorney General Hayes appeared on
bhalf of Gov. William A. Egan and the
Alaska congressional delegation. t6
com-
ment on the 1964 amendments to the
Alaska Omnibus Act. He correctly
called the bill a "good bill" and he cor-
rectly pointed out ways in which it could
be made better.
The attorney general called to the
committee's attention the important fact
that "due to sound financial manage-
ment, we?Alaska--have always ended
each fiscal year with a surplus." Alaska
has done this and has provided the es-
sential services needed to sustain a popu-
lation of 250,000 people spread over a
land area one-fifth the size of the con-
tiguous 48 States. As George Hayes said:
We proved we could afford statehood?but
'WO cannot afford an earthquake of the
magnitude of the one that occurred on March
League for Peace and Preedom in es ai 27. 1964.
t_
13 each, Fla.: "I Din writing to commend The amendments proposed by the a
yOu on yotir stand in favor of negotiation torney general are simple and sound.
and reevaNatiori?of ITS. olicy in Vietnam. J3-
I am thoreughfi- of the opinion we should _ The first amendment would permit the
never have,, sent our t e --fid-uow. Hous
should withdraW. tht ''''
93's ?..:-. egfttlioiVig
?
rietaldRAtigaoAnis_o3
$014
12160 Approved F o rbsz4GREggt5tuviaceAsta9 enaigheffl000 20 0159 044-4 June 8
atonal delegation 'are grateful. We are grate-
ful, too, for the immediate attention given
to MIT problems by the President .of the
Dated States. We also recognize and are
Indebted to the array of capable talent in
the person of Mr. Dwight Ink, Executive Di-
rector of the Coniraleelori, and his line stall.
I've personally observed their hard work,
their extra long hours and their devotion to
the task assigned to them by Senator Axe-
Inersorr. .The cooperation extended to us by
all of the Federal departments and agencies
could not have been better.
If the aid already given together with that
proposed here were to be the sum total, we
could have no complaint.
The omnibus bill as drafted and presented
is a good bill. It goes a long way.
The fact that we have suggestions to offer
by way of amendments does not alter our
respect for the great measure of aid incor-
porated in the present form of the bill.
We all hope that the two changes I am sug-
gesting to you will not be mistaken by you
as a sign of insufficient recognition of the
good already accomplished.
We would not make these requests of you
If we did not firmly believe them to be essen-
tial to the rate of our recovery. If the Con-
gress were to agree with us in these two
areas, it would cost the Federal Government
somewhat more than would be the case if the
bill passes in Its present form. While the
State of Alaska is participating in the coat
Of reconstruction, the unhappy fact is that
the State government and its citizens are
riot presently in a position financially to as-
sist in our own recovery to the extent we
Would like. It we were in a better position,
we would not make this request.
Prior to outlining our suggestions may
I give you a brief history of the State's finan-
cial position?
When we became a State in 1.959 our State
enjoyed a gross State product in the neigh-
borhood of some $800 million a year. Our
first State appropriation bill, excluding Fed-
eral matching funds for items such as Fed-
eral aid to highways, was In the amount of
approximately $41,600,000. In 1960 the leg-
islature appropriated approximately $47,200,-
000. In 1061, 00,300,000. In 1962, $87,600,-
000. In 1963, 485,300,000. In 1964, 481,-
200,000.
Due to sound financial management, we
have always ended each fiscal year with a
surplus. The State of Alaska has, in its
brief history, operated in the black. In ad-
dition to these expenditures, ow State leg-
islature and our citizens have authorized a
capital improvement program coating 450,-
825,000?all in general obligation bonds.
We've already issued $39,201,000 of these
bonds for schools, roads, ferry system.. Uni-
versity of Alaska, and airfields. We must yet
Issue $11,824,000 to complete these programs.
Mr. Chairman, members of the committee,
While we take great pride in these services,
these programs have never been luxury items.
They provide bare essential services needed
to sustain a population of 250,000 people
spread over an area of nearly 600,000 square
miles. We b.dve drawn upon and continue to
draw upon the resources of approximately
50,000 State taxpayers. We proved we could
afford statehood?but we cannot afford an
earthquake of the magnitude of the one that
occurred on March 27, 1964.
We have no alternative but to commit our
financial resources to the continuation of
these minimum services if we are to main-
tain our population?let alone grow. It is
for this reason alone that I ask you to con-
sider amendments to two areas of this bill.
Section 53 of S. 2881 authorizes the HECPA
Administrator to enter into contracts with
our political subdivisions and the Alaska
State Housing Authority for urban renewal
projects. The U.S share of the net costs
malty contribute the other 25 percent. Some
weeks ago it had been proposed to the Com-
mission by HECPA that the ratio for disaster
connected urban renewal projects be changed
to 90/10 percent. The various members of
the Commission recognized that the cost of
the urban renewal projects was an entirely
new expenditure thrust upon our taxpayers
as a result of the earthquake. They recog-
nized. also, that we could not afford such a
program if the cost to us amounted to 25
percent of the net coats. The present form
of the bill reduces the total amcunt of
moneys authorized for the URA programs
over what had been originally proposed.
Moreover, it does not authorize a 90/10 per-
cent contributive ratio as had been proposed
earlier. It Is estimated by the Alaska State
Housing Authority that disaster-connected
URA programs could have a net project cost
of approximately $40 million. If the present
76-25 ratio is not changed, the State of
Alaska and its cities would have to contribute
$10 million of that cost. The U.S. portion
would be $30 million. At a 90-10 ririci, our
cost would be $4 million and the Federal
cost would be $38 million. The present form
of the omnibus bill authorizes a Federal
contributive share not to exceed $25 million.
Under this limitation, of course, the actual
dollar cost to both the United States and
the State and local governments is less. We
believe, as does the Commission, that URA
projects are an important part of our re-
covery. We earnestly request that for dis-
aster-connected Urban Renewal Administra-
tion projects the Federal administrator be
permitted to contribute up to 90 perrent of
the net project costs, if. in his discretion.
such a share is necessary to carry out a par-
ticular program at all. We don't request
that a 90-10 ratio be made mandatory, but
permissive only so as to enable the urban
renewal authority to implement the recovery
program where State and local contributive
funds simply cannot be raised on a 75-25
basis.
Under present urban renewal authority.
payment for property taken for urban re-
newal projects is made on the basis of the
value at the time of the taking. In =thy
cases a disaster-connected urban renewal
project will be based upon greatly depressed
prices due to subsidence of the land taken
for the project, or the ruination of the home
on the land, or both. We would like to
point out to the committee that if the URA-
administrator had the legal authority to pay
prices for land conaenthed or purchased at a
price related to the value prior to the dis-
aster, such a measure would assist consider-
ably in the restoration work envisioned in
the urban renewal projects.
The other request we would urge the com-
mittee to consider Is an amendment to sec-
tion 58 of the proposed omnibus bill. Ac-
cording to this section, as presently written,
the State of Alaska may borrow from the
U.S. Government an amount not to exceed
$25 million at a present rate of interest of
3% percent. Our legislature has recently
authorized issuance of bonds or borrowing
authority in the amount of $12.300.000 to be
used for disaster recovery purposes. This
authorization by the legislature canasta of
three separate programs. One Is to provide
the State's share of matching funds for the
reconstruction of our highways. A second
Is to provide for a State's share not to ex-
ceed 10 percent of the net project costs of
disaster-connected urban renewal projects in
the State. The third authorizes tae ex-
penditure of up to $2 million for rebuilding
of public buildings that OEP and other
funds may not be available to us for one
reason or another,
Our State commissioner of revenue has
compiled a table showing the amount of in-
terest the State would be required to pay
of such projects, unapr_present, pver 40 4
75 percent of such cosaisPpraveuer elexcekearte
stoner has also compiled a table assuming a
loan at 3% percent of only 312,300,000. The
table shows a total amount of interest Alaska
would have to pay over 40 years on a $25
million loan.
That amount is over 318% million. On a
$12,300,000 loan from the Federal Govern-
ment the amount of interest over 40 years is
over $9,140,000. The Commissioner of Rev-
enue has also compiled tables showing what
our interest rates would be at 3% percent
(which is the rate which will be in force on
July 1 according to our understanding). For
the purposes of comparison, he has drafted
tables of the total cost in dollars to the
State if the State were to borrow moneys
from the United States in the amount of $25
million at 3 percent and 2 percent. He has
also drafted similar tables for a loan of $12,-
300.000. Although the total price in dollars
over 40 years would not be high to a State
more fully developed financially than we, it
is high to Us. We have obligated, ourselves
already as a State for more than $39 million
in general obligation bonds. We shall soon
be paying an average of $2% million a year
principal and interest on these general obli-
gation bonds. We do not know to what ex-
tent our growth rate has been slowed by the
earthquake. We do know, for instance, that
our gross tax collections for the month of
May were $1,344,000 less than May of 1963.
We ordinarily would have expected an in-
crease of gross tax collections over May of
1963 of some $350.000. This would have been
our normal growth rate. Thus, when the
grows tax collection shortfall is coupled with
the gross tax collection we did not get due
to our failure to grow it amounts to $1,694.-
244. This does not include State tax refunds
which will be made due to losses caused by
the earthquake. Thus our ability to pay for
our ow-n recovery is not as strong as we wish
It were. We would urge the committee to
amend the omnibus bill and reduce the rate
of interest on any loans made by the U.S.
Government to Alaska to a rate lower than
3% percent. As can be seen from the tables
compiled by our Commissioner of Revenue, a
difference of 1 percent over 40 years on a loan
of $12,300.000 amounts to 32% million. This
Is a considerable amount of money.
As to our regular general obligation bonds,
our financial advisers tell us that we can
expect to pay a high interest rate on the
open market. Their view Is that we may
have to pay as high as 4% or 4% percent.
Members of the U.S. Treasury agree that
our current credit standing has been im-
paired and that a sale of the remainder of
our general obligation bonds now or in the
near future would require us to pay an ab-
normally high interest rate. Our present
program calls for a sale of general obligation
bonds in the amount of $7,200,000 during the
next fiscal year, probably next spring. We
are hoping that our credit position will im-
prove considerably by next spring. We be-
lieve it will. Federal aid surely will not be
lost on bond buyers. Your assistance al-
ready provided and to be provided will prob-
ably bring the interest rate, we will be re-
quired to pay, down to levels we can live
with. But no one can be sure. In order to
make certain we can carry out our necessary,
normal capital improvement program, we
would like to have the assistance applied to
our regular bond issue that is being pres-
ently proposed in this omnibus bill for dis-
aster loans. This assistance may not be
necessary. Hopefully we can obtain a favor-
able rate_of interest by next spring. But, if
we cannot?and if the Federal Government
will submit a bid for our bonds at a rate of
Interest of 3% or 3% percent, or whatever
rate money costs the United States?we can
be assured that our regular capital improve-
ment program will continue. Such assistance
should not cost the Federal Government any
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I .41 I