AMENDMENT OF FOREIGN ASSISTANCE ACT OF 1961

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000300090002-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 17
• Document Creation Date: December 23, 2016
• Document Release Date: February 21, 2014
• Sequence Number: 2
• Publication Date: August 10, 1964
• Content Type: OPEN SOURCE

'
?-?
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
1964 CONGRESSIONAL RECORD ? SENATE
objectives of the Alliance for Progress
are to be achieved.
MAJOR PROBLEMS
These are a few examples of the ac-
complishments of development assist-
ance to the less developed countries.
Although it is too early to give a frill
e-valuation of the effectiveness of such
assiStance in producing self-sustaining
economic growth, and in strengthening
democratic institutions, there is general
agreement that foreign aid has been a
success and that it should continue.
Since 1960, a num"ber of the more con-
spicuous weaknesses in foreign aid have
been colrected, and others are being cor-
rected under the able leadership of David
Bell?I might add, respectfully, under
the continuous prodding of the Senate
Foreign Relations Committee and cer-
tain Senators who have spent a good
deal of time seeking to improve the for-
eign aid structure.
MORE EMPHASIS ON EDUCATION
Of the major remaining problems, one
of the more vexing is what is sometimes
referred to as the lack of "human re7
sources" or the "institutional frame-
work" for development. Long a stum-
bling block in our aid program to the
less developed countries, this continues
to be a basic weakness in our, whole aid
effort. Three years ago, when the For-
eign Assistance Act of 1961 was being
considered by the Senate, I held some
conferences with aid officials, in which
I urged greater attention to educational
assistance in the aid program. Although
there have been some improvements in
this respect, much more needs to be
done. We should be considering, in co-
operation with other donor nations and
the World Bank, a much larger program
of educational assistance, from grade
school through the university.
THE NEED FOR POLITICAL DEVELOPMENT
Clearly, much more attention must
also be given in fields related to political
development. Progress has been made in
these areas, especially in tax administra-
tion, but considerably more work needs
to be done. Assistance of this nature is
usually referred to under the broad cate-
gory of "public administration," which
includes such occupational groups as
tax experts, budget and fiscal specialists,
auditors and accountants, personnel
tand management specialists, procure-
ment officers, and the like. Over 6,000
persons in these and other categories
of public administration have been
trained in the United States under the
foreign aid program. We have also as-
sisted with the establishment of public
administration institutes in about 30 less
developed countries. This is a signifi-
cant record, but in view of the woeful
lack of adequate administration in the
less developed countries, I believe that
a far larger effort needs to be made in
this vital field.
There has been some talk, largely in
academic circles and among the policy
planners in the State Department, about
the need for more emphasis on "political
development" in the foreign aid program.
Besides increasing our public adminis-
tration activities, which certainly are
directly related to political development,
I believe that we need to launch some
new programs for the purpose of assist-
ing With the political development of
less developed countries. The aim of
these would be to bring present and po-
tential leaders into direct contact with
democracy in action, as well as to enable
them to study the history and principles
of democracy. Many of our training
programs do this indirectly. I believe
that we need to design new programs
whose direct aim will be to provide such
training and experience, strengthening
our present programs in this respect.
One of the primary difficulties with our
aid program to the less-developed coun-
tries has been the lack of attention to
political development. We have tended
to assume that economic development
was good per se. Some even seem to
believe that democratic political develop-
ment will automatically result from eco-
nomic development. To a certain ex-
tent this is probably true, but the one
does not necessarily follow the other.
Economic development can and often
does have a disruptive effect politically.
This can lead to political instability,
which, in turn, can result in an authori-
tarian political system.
Political development and economic
development must, therefore, be carried
out jointly. In order for countries to
develop along democratic lines political-
ly, programs of democratc political
training should become a vital part of
our aid program.
A related field of great importance is
that of labor training and organization,
and the development of cooperatives.
The trade union movement and the co-
operative movement have historically
been basic forces in building a strong
democratic society. Some progress has
been made in providing assistance of this
type, especially in the development of
cooperatives in Latin America, but con-
siderably more needs to be done.
Related.to this is the need for increased
attention to the development of entre-
preneurship, or private business enter-
prise, in the less-developed countries.
Economic and political development re-
quires an attitude of local enterprise, and
the assumption of personal responsibility.
People must want to get ahead in order
for lasting progress to occur. Private
initiative is the key to economic growth
and to a healthy, competitive political
system in less-developed countries just
as it is in the United States. Trans-
ferring these attitudes, of course, to other
nations is difficult but not impossible.
Again, some progress has been made, but
much remains to be done.
I am gratified by the work being done
by American universities in this field
under AID auspices. Such projects as
Harvard's business administration pro-
gram in Central America, and the work of
the University of Minnesota in higher
education in economics in Colombia are
examples of one approach to the problem.
These and other efforts for encouraging
private enterprise and private initiative
should be encouraged and expanded.
Along with educational assistance, po-
litical development programs, and labor
and cooperative work, training in entre-
18213
preneurship should be a cardinal part of
our aid effort.
THE IMPORTANCE OF CONTINUED AMERICAN
LEADERSHIP
As the leader of the free world, the
United States must continue to play the
leading role in providing assistance to the
less-developed countries. The need is
greater than ever, but so are the oppor-
tunities for achieving significant progress
toward development. ?
I believe that the time has come to rec-
ognize we are in this game to stay and to
win. To call it quits, or to shirk our re-
sponsibilities would be to forfeit one of
the most important chances a nation
ever had to make a lasting contribution to
mankind. All of our humanitarian in-
stincts tell us that what we are doing is
right, and must be continued. Our sense
of history and our awareness of the in-
terests of all freemen in the creation of
a community of free nations tell us to
press on.
America is the most powerful democra-
tic, nation in human history. What we
do with our enormous power?how we
use our vast resourves?will determine
the course of history and the future of
the human race. Whether by destiny or
not, the responsibility of 'world leader-
ship has brought us to use our power for
maintaining international peace and sta-
bility, and for helping less fortunate
countries as they struggle to improve
their lot.
Now, having successfully revived Eu-
rope, and prevented Communist aggres-
sion, we are at the dawn of development.
There is a great day ahead for those who,
with our help, can marshal their own
resources and work toward improving
their conditions of life.
Patience and determination will be re-
quired. Change is slow and often pain-
ful. Setbacks are to be expected. Mis-
takes have been made, and will be made.
But progress is seldom made along a
straight line, and we must be as patient
with others and their development as we
are with ourselves and our own develop-
ment. If we should be concerned about
the time it takes countries to reform their
tax systems, for example, we would do
well to remember that only 50 years ago,
after a bitter struggle, was the progres-
sive income tax finally established in the
United States.
It is wrong to expect too much too
soon. Funds are limited. Expectations
must also be limited. We cannot be all
things to all men. We can and must
continue to help those who want to heli
themselves, and to achieve for them-
selves and their posterity the blessings
of life, liberty, and the pursuit of hap-
piness.
The foreign aid program then is an
effective instrument of American policy.
But it is more than that and I hope the
day will never come when Americans are
reluctant to admit it. In a sense it is a
manifestation of one of the most gen-
erous and unique aspects of contempo-
rary civilization?that well described by
Arnold Toynbee when he said:
My own guess is that our age will be re-
membered chiefly neither for its horrifying
crimes nor for its astonishing inventions,
but for its having been the first age since
Declassified and Approved For Release 2014/02/21 : CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18214 CONGRESSIONAL RECORD ? SENATE
the dawn of civilization some 5,000 or 6,000
years back, in which people dared to think
it -practicable to make the benefits of civil-
ization available for the whole human race.
That is a lofty goal. But it is one that
ought to motivate us.
As I conclude these remarks, I once
again encourage the AID administra-
tion to concentrate its resources and its
attention upon the development of hu-
man resources, upon the development of
agricultural programs in the less devel-
oped areas, and upon the improvement
of the political structure in those areas
so that the administration of the pro-
gram may be more sound and more ef-
fective. It seems to me that unless we
-do this much, our military assistance
and our economic assistance will be
wasted -and will be anything but help-
ful and effective.
It is in this spirit of encouraging the
improvement of the administration that
I support the extension of foreign aid
assistance. It is my intention to sup-
port the bill befdre the Senate in the
hope that it may contribute toward a
more peaceful and progressive world.
Mr. MORSE. Mr. President, I was
very glad to hear the speech of the Sena-
tor from Minnesota [Mr. HUMPHREY]. I
thought that his speech in favor of the
administration's point of view was en-
titled to a larger audience than the two
Senators and the Presiding Officer who
listened to the speech.
I do not expect to read in the news-
papers from the kept press, whose repre-
sentatives sit above the clock, any nega-
tive criticism of the Senator from Minne-
sota [Mr. HUMPHREY] that because he
had such a small audience, he did not
have any influence in the Senate. We all
know that the Senator from Minnesota
is a man of great influence. But this is
not the first time that I have heard the
Senator from Minnesota [Mr. HUM-
PHREY], the Senator from Arkansas [Mr.
FuLsRiorrl, the majority leader [Mr.
MANSFIELD], and many other Senators
speak at various times of the day with
only two or three other Senators present
in-the Chamber. But the AP and the UP,
one can be sure?as is typical of their
journalistic tactics?will make sure that
if any Senator speaks against the ad-
ministration's point of view, it becomes
known that only two or three Sen-
ators were present in the Chamber at the
time. That is true of most of the news-
paper representatives who sit above the
clock.
Mr. President, the senior Senat-or from
Oregon does not give one whit or care
whether closed minds sit in the Senate
Chamber and listen to him or not. I
shall continue to speak to the American
people, which is my trust at this desk. I
shall speak to the American people about
the ,unsoundness of the foreign aid bill,
which was just defended by the Senator
from Minnesota [Mr. HUMPHREY]. We
heard not one word from the Senator
from Minnesota about specific criticism
of foreign aid. I join the Senator from
Minnesota in supporting a continuance
of foreign aid. We merely disagree as to
how it should be continued.
Approximately $105 billion- is a great
deal of money. We have not received re-
turns for the $105 billion expended for
foreign? aid since 1946. The time has
come to put some checks on the extrav-
agance of this program. The senior
Senator from Oregon has been trying to
put some checks on this extravagant and
unsound program. We have available to
us?and I have quoted from them in my
individual views?a stack of reports from
the Comptroller General of the United
States, setting forth criticism after criti-
cism, and his findings in spot surveys
of the administration of foreign aid since
1946.
The,senior Senator from Oregon will
continue to plead for some reform in the
foreign aid program.
I shall plead for the adoption of an
amendment?which I shall offer before
the week is over?seeking to bring to an
end the foreign aid program at the close
of fiscal 1966, and start it over again.
I want to continue foreign aid, but a
new type of foreign aid. I want to con-
tinue foreign aid on the basis of estab-
lishing terms and conditions that apply-
ing countries will agree to accept before
they receive their money. What is wrong
with that? Of course, that means that
we shall stop the kind of foreign aid, un-
der the program that I suggest, by means
of which we ram it down the economic
gullets of countries that in many in-
stances have not asked for the specific
aid that we have given. We have done
much persuading since 1946 to induce
countries to take foreign aid. I 'believe
that is wrong. We ought to have a for-
eign aid program that seeks to do exactly
what the Senator from Minnesota [Mr.
Humpmay] approved of?namely, to be
of assistance to people. Unless foreign
aid is of assistance to people, and to the
mass of people in the underdeveloped
countries of the world, it will not stop
communism. It will be an aid to com-
munism.
Foreign aid that has aided the con-
tinuation of dictatorship governments in
various parts of the world since 1946 has
been expended on the part of American
taxpayers, through their Government, to
strengthen communism and totalitarian-
ism around the world.
There is a basic principle of policy in-
volved in foreign aid. The senior Sen-
ator from Oregor is seeking only to try
to reform the policies, not to destroy for-
eign aid. But a continuation of the
present foreign aid policies in man re-
spects would continue to defeat the very
purpose of foreign aid.
The Senator from Minnesota, as has
always been done by a spokesman for the
administration, talked about the malaria
program, the health program, the farm-
ers' cooperative, and so on. I am all for
it. But those are only minor features
of American foreign aid. The Senator
from Minnesota has not addressed him-
self at all to the bulk of the aid program.
Take into account the billions of dol-
lars of American taxpayers' money that
we have sent down the ratholes around
the world under the illusion that we were
supporting and building up military de-
fense against communism. We then get
some idea of what waste there has been.
We are getting a little taste of it in the
Mediterranean today.
August 10
We made the military power strong
In Turkey. Before the week is over, I
shall give Senators an opportunity?I
know what the vote will be?to vote to
bring to an end the terrific building up
of military war machines of both Greece
and Turkey.
It started on the assumption that it
would be of help to the United States,
and would be directed against Russia.
As I said on Saturday, in Greece, Tur-
key, Pakistan, India, South Korea, For-
-mosa, and other areas people continue to
live under the canopy of American nu-
clear power.
That is Where their security is to be
found and not in the terrific military aid
program that we have been handing out
to them all these years. I wish to help -
the people of Turkey. I wish to help
the people of Greece. I wish to help the
people of India. I wish to.help the peo-
ple of Pakistan. I wish to help -the peo-
ple in all underdeveloped areas. But
pouring that kind of aid by the hundreds
of millions of dollars into their govern-
ments has not helped the people. In
many instances it has weakened the
cause of freedom.
Mr. President, I yield to no other Sen-
ator in my desire to make the Alliance
for Progress program work. The Sen-
ator from Minnesota need yield to no
other Senator for the great contribu-
tions which has has made to the Alliance
for Progress program. I do not find my-
self happy in a disagreement with the
Senator from Minnesota over many as-
pects of the foreign aid program. I _
would rather be with him than against
him. But so long as he is with the ad-
ministration's foreign aid program with
no more modifications of it than I have
heard enunciated in his speech today or
at any other time, I cannot be with him
on certain features of the foreign aid
program. I hope that eventually we
shall be back together on foreign aid,
but we must reform foreign aid to have
a sound foreign aid program.
I wish to help develop loan programs.
I wish to repeat a statement I have made.
I am sure it has probably reached the
point of boredom in the Senate, but it is
not at the point of boredom in the coun-
try, because more and more people are
only beginning to understand the facts
about foreign aid and the need for re-
form of foreign aid. I say again that
the major premise of foreign aid ought
to be devoted to individual projects,
economic in nature, if we are to help
raise the standard of living of the mass
of people, in that given area who will
live within the economic environment of
those projects. That ought to be our
objective.
My first amendment, which is* now
pending, and on which the Senate will
vote shortly, is an amendment in which
I have asked to write into the foreign
aid bill-that principle of policy, a prin-
ciple which in effect states that we shall
lay major emphasis on economic devel-
opment. When we have a country which
is maintaining a military machine
greater than its own economy should
support or could support, we should take
away from that country foreign aid until
it is willing to adjust its military estab-
Declassified and Approved For Release 2014/02/21 : CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
1964 CONGRESSIONAL CONGRESSIONAL RECORD ? SENATE
lishment to a size which its economic
ability can support; then I am for aiding
the economic development of that coun-
try. In the amendmgnt I am saying, as
I shall say in other forums and in other
amendments before the week is over, that
we ought to cut down and cut back on
military aid, because it has been puffed
up into a balloon of gross overemphasis
and misrepresentation as to its effective-
ness.
Too much American military aid is
more likely to be causative of war than
peace around the world. As various
little dictatorships or large dictatorships
or military oligarchies in various coun-
tries come into power, they will not use
it for peaceful purposes. We could not
have a better example of that than
_ Turkey. We have poured hundreds of
millions of dollars of aid into Turkey
since 1946. We have built up there a
? terrific military oligarchy. There is no
freedom in Turkey. When the American
people have listened to speeches for the
administration, they would be led to
think that we are supporting freedom
by foreign aid. In many parts of the
world -our foreign aid program is sup-
porting the continuation of dictator-
ships. There is no better example of it
than South Vietnam, which is a com-
plete military dictatorship by an Ameri-
can military puppet.
Mr. President, let 'us have a foreign
aid program, but let us have a reformed
foreign aid program. Let us have a for-
eign aid program that is primarily ad-
justed to meet the needs of people. That
means that we should develop a foreign
aid program that would deal with indi-
vidual projects primarily. That does not
mean the elimination of all grant money
for great humanitarian purposes, such as
malaria control, which the administra-
tion always trots out in support of a for-
eign aid program which includes billions
of dollars for entirely different purposes.
Malaria control is but a small and in-
significant part of the foreign aid pro-
gram, but an important part, and one of
the lustifiable parts of the foreign aid
program.
Let us continue with the humanitarian
grant money programs in connection
with our health programs and baby-care
programs. Let us continue those grant
programs about which there will be no
dispute on clear and justifiable moral
grounds. I am pleading for morality in
the administration of our foreign aid
program. But le us stop using our for-
eign aid program, or misusing it, as we
are in many particulars, in building up
military dynasties . and dictatorships.
Let us recognize that the American tax-
payer at long last has the right to be pro-
tected so far as his interests are con-
cerned in the foreign aid program.
Why does the administration continu-
ously claim?and it was cited by the Sen-
ator from Minnesota today?that the
foreign aid program has increasing sup-
port among American businessmen? At
least it is so alleged. Let us-grant it. I
doubt it, but let us grant the correctness
of the statement. It is not the small
businessmen on the main streets of this
country who support it. They are be-
coming increasingly skeptical about the
foreign aid program.
Powerful American business interests
are very much interested in the argu-
ment of bribery which has been involved
in the foreign aid program for years, for
the administration continues to point
out that about 80 percent of foreign aid
is really spent in the United States, and
that therefore it is in our national eco-
nomic interest to continue the foreign
aid program.
Mr. President, is this a make-work pro-
gram? Is this some kind of indirect dole
system that we are advocating? if this
administration wants some make-work
programs, I will give them one, but I will
give it a make-work program that will
meet some of the crying needs of our
domestic problems. It will be a program
to do something to bring about the end
of slums which have brought so many to
discontent in this critical domestic hour
in the history of our country. If the ad-
ministration wants a make-work pro-
gram, I will advocate one to do some-
thing about the impoverished condition
of American education and the crying
need for new classrooms. If it wants a
make-work program, I call attention to
the unattended needs of public works
programs about which we can do some-
thing, rather than the kind of dole sys-
tem involved in the foreign aid program.
I am speaking about the need for
bringing about long-needed reforms in
the foreign aid program. The first batch
of amendments which I shall offer today
and tomorrow will deal primarily with
policy reforms in foreign aid. After they
are disposed of, I shall move to the
money amendments, in which I seek to
reduce the amounts at various points in
the program.
Before I take my seat, I want to com-
ment once more, as I have over and over
again, about the argument that some
other countries are doing something by
way of foreign aid on their own part.
They have been long delayed. We have
had to push them into it by diplomatic
representation after diplomatic repre-
sentation.
We have been representing to them,
through American diplomats, that they
will have more and more trouble in for-
eign aid with the Government of the
United States and with the people of the
United States unless a better showing of
participation is made on the part of
countries that we have aided, such as
France, West Germany, Italy, Portugal,
the low countries, and the Scandinavian
countries.
They are participating somewhat in
foreign aid. Very little grant money is
provided, for the most part, with few
exceptions. Their loan programs are a
far cry from the U.S. loan programs.
They are a far cry from the alleged loan
programs we make, which consist of the
bulk of our loan programs; namely, in-
terest of three-quarters of 1 percent,
with a period of 10 years to pay nothing,
and a repayment period of 40 to 50
years, if they ever do pay back. In my
judgment, most of them never will. A
large percentage of the amount to be
paid back is to be paid not in American
dollars, but in soft currency.
Do not talk to me about a comparison
of the foreign aid that Great Britain,
France, Germany, and the other coun-
18215
tries make. They have more sense than
to treat their own taxpayers as we do,
by and large. One of the most disturb-
ing things about the foreign aid pro-
gram is that sometimes we make a loan
at an interest rate of three-quarters of
1 percent, with a 10-year grace period,
in which nothing is to be paid, and 40
to 50 years to pay the loan back, to be
paid in soft currency, only to find that
after getting a loan the government
has thereafter paid back a British or a
Russian or a French loan, on which it
had been paying interest of 5 or 6 per-
cent.
My colleagues may not wish to hear
me say it, but I do not think that is fair
treatment of the American taxpayers.
There is talk about programs of aid by
other countries. It is interesting to find
to what extent this aid is going to former
colonies.- That is ,typical of the French
and Great Britain foreign aid, as well as
that of Belgium and the Netherlands.
They still exercise economic dominance
over the recipient countries. Their still
exercise economic control over countries
which, to all intents and purposes, are
closely tied economically to the former
mother country. It is to their economic
advantage to make the kind of economic
loans that they are making to their
former colonies. All -of Portugal's aid
goes to countries that she claims are
really her "provinces."
It is quite different from the type of
loan we make, because we have no colo-
nies?thank God. We do not operate on
that principle, and we must not come to
operate on it, even indirectly.
The undeniable fact is that no country
in the world has come anywhere near
supporting a foreign aid program such as
the United States has, and never will.
The people of no country in the world
would let their government leaders foist
upon them a foreign aid program that is
so wrong, in so many respects, in con-
nection with matters of policy.
I seek a change. But, say the gentle-
men of the press, and others, "Now, you
really do not hope, do you, in this elec-
tion year, to have very many of your
amendments, if any, adopted?" I have
said, "No; I do not"; but that does not
justify my not making the effort to give
Senators the opportunity to reform for-
eign aid.
It is just as important to reform for-
eign aid in an election year as it is in
any nonelection year, because I see no
connection between our responsibilities
and an election. We have the duty of
voting on the question on the basis of the
merits, independent of politics and politi-
cal considerations. There are many
things we could do to reform foreign aid,
rather than rubberstamping it, for it is
not a "barebones" program. It is a pro-
gram that calls for more in money than
the administration received last year.
The request of this administration is not
for what it received last year, but for an
amount in excess of it by $500 million.
It has been represented for years that
the administration is going to taper off in
foreign aid and let the recipient countries
do more for themselves; that we are go-
ing to urge greater foreign investments.
A substantial portion of foreign aid now
paid for out of the American taxpayers'
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21 : CIA-RDP66B00403R000300090002-9
18216 CONGRESSIONAL RECORD -- SENATE
dollars ought to be paid for by way of in-
vestments by American investors in Latin
America. But, of course, they could not
get loans at three-fourths of 1 percent
interest, with 10 years in which to pay
nothing, and 40 to 50 years to pay back
with soft currencies.
So long as we follow that policy, we
shall continue to do great damage to the
development of economic freedom in
large areas of the world.
I believe that economic freedom, as
represented by the private enterprise
system, as represented by our private
economy, determines whether political
freedom will remain for us, and whether
political freedom will be implanted in
any of the underdeveloped areas of the
world.
No one seems to wish to meet me on
that truism. It is unanswerable. Unless
we build up the economic system in.Tur-
key, Greece, South Vietnam, Peru, or
anywhere else in the world, and bottom
it upon a foundation of economic free-
dom, as represented by a private enter-
prise system, there is no hope of those
people becoming politically free.
- The senior Senator from Oregon is not
a radical on this issue. The advocates of
perpetuating the present foreign aid sys-
tem are the radicals. They are the ones
who are keeping us from strengthening
and developing economic freedom in the
foreign aid recipient countries.
I wish to bring American business into
the scene as partners and cooperators
abroad, not as subsidized businesses here
in the United States, reaping profits from
foreign aid and expenditures in the Unit-
ed States.
As chairman of the Subcommittee on
Latin American Affairs, in respect to the
Alliance for Progress programti, I have
pleaded, and will continue to plead, for
the development of industries in the
countries wherethey are needed in all of
Latin America.
If we establish a pattern of economic
freedom through private enterprise
throughout Latin America, we shall not
only make the Alliance for Progress work,
but in the long term we shall sell in Latin
America several times the amount of
goods now exported to Latin America, be-
cause we shall, by this establishment of
economic freedom, build up purchasing
power on the part of the masses of Latin
America. That is the hope for political
freedom in Latin America.
We cannot do it by giving support to a
foreign aid program which amounts, in
fact, to general purpose loans and grants.
That whole program should be directed
to specific projects on which we are will-
ing to come in and help, and in respect
to which a good many American private
enterprisers would be willing to help.
That is why, in the Foreign Relations
Committee, Senators have found me a
strong supporter of various proposals
for reasonable and equitable loan guar-
antees or investment guarantees on the
part of American companies in under-
developed areas of the world.
One of the hottest sp6ts is in Haiti.
People are astounded to find that the
senior Senator from Oregon is advocat-
ing and perfectly willing to support a
program in which several American cora-
panies have interested themselves for
development of some economic projects
in Haiti. All they need is a little en-
couragement from the Government and
a fair and equitable loan and develop-
ment guarantee program.
Why not? I would be in favor of
taking the risk. It would be much bet-
ter than to try to accomplish anything
on a government-to-government basis.
I close by saying that I km glad we
have had the presentation of the ad-
ministration's position by the Senator
from Minnesota [Mr. HUMPHREY] , even
though only two Senators were present
most of the time. He ought to have
had a much larger attendance.
I reject the presentation as to most of
the points, as I have been rejecting that
presentation in the Foreign Relations
Committee.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment offered by the Senator from Ore-
gon [Mr. MORSE].
Mr. PULBRIGHT. Mr. President, I
overlooked making this request. I ask
unanimous consent that the committee
amendments be agreed to en bloc, and
that the bill be considered as original
text for purpose of amendment.
The PRESIDING OFFICER. Is there
objection? The Chair hears none, and
it is so ordered.
The question is on agreeing to the
amendment 'offered by the Senator from
Oregon [Mr. MORSE]. On this question
the yeas and nays have been ordered,
and the clerk will call the roll.
The legislative clerk called the roll.
Mr. MANSFIELD (after having voted
in the negative) . On this vote, I have a
live pair with the senior Senator from
Indiana [Mr. HARTKE]. If he were pres-
ent, he would vote "nay"; if I were at
liberty to vote, I would vote "yea." I
withdraw my vote.
Mr. HUMPHREY. I announce that
the Senator from North Dakota [Mr.
Burtmcx], the Senator from Tennessee
[Mr. GORE], the Senator from Michigan
[Mr. HART], the Senator from Washing-
ton [Mr. JACKSON], the Senator from
Louisiana [Mr. Loris], the Senator from
Washington [Mr. MAGNUSON] , the Sena-
tor from New Hampshire [Mr. McIN-
TYRE] , the Senator from Utah [Mr.
Moss], and the Senator from Ohio [Mr.
YOUNG], are absent on official business.
I also announce that the Senator from
New Mexico [Mr. ANDERSON], and the
Senator from Massachusetts [Mr. KEN-
NEDY] , are absent because of illness. '
I further announce that the Senator
from Nevada [Mr. CANNON] , the Senator
from Pennsylvania [Mr. CLARK], the
Senator from Oklahoma [Mr. EDMOND-
soN] , the Senator from New Jersey [Mr.
WILLIAMS], and the Senator from Indi-
ana [Mr. HARTKE] , are necessarily ab-
sent.
On this vote, the Senator from Louisi-
ana [Mr. LoaCis] is paired with the Sena-
,tor from New Jersey [Mr. WILLIAMS].
If present and voting, the Senator
from New Jersey would vote "nay" and
the Senator from Louisiana would vote
"yea."
I further announce that, if present
and voting, the Senator,from New Mex-
August 10
leo [Mr. ANDERSON], the Senator
from Ohio [Mr. YOUNG] , the Sena-
tor from North Dakota [Mr. Buruncx],
the Senator from Washington [Mr.
JACKSON] , and the Senator from New
Hampshire [Mr. MCINTYRE] would each
vote "nay."
Mr. KUCHEL. I announce that the
Senator from Kansas [Mr. PEARSON], the
Senator from Texas [Mr. TOWER], and
the Senator from Pennsylvania [Mr.
Scorr] are necessarily absent.
The Senator from New York [Mr. JAV-
ITS] is absent on official business.
The Senator from Kentucky [Mr.
COOPER], the Senator from Arizona [Mr.
GOLDWATER], and the Senator from New
Hampshire [Mr. COTTON] are detained
on official business.
If present and voting, the Senator
from KansaS [Mr. PEARSON], the Sena-
tor from New Hampshire [Mr. COTTON] ,
the Senator from Arizona [Mr. GOLD-
WATER], the Senator from New York
[Mr. JAms], and the Senator from
Texas [Mr. TOWER] would each vote
"nay."
On this vote, the Senator from Ken-
tucky [Mr. COOPER] is paired with the
Senator from Pennsylvania [Mr. SCOTT].
If present and voting, the Senator from
Kentucky would vote "yea" and the Sen-
ator from Pennsylvania would vote
"nay."
The result was announced?yeas 17,
nays 59, as follows:
[No. 525 Leg.]
YEAS-17
Bayh Gruening Pell
Bible Johnston Proxmire
Byrd, Va. McGovern Randolph
Church Metcalf Robertson
Douglas Morse Russell
Ellender Nelson
NAYS-59
Aiken Hill Muskie
Allott Holland Neuberger
Bartlett Hruska Pastore
Beall Humphrey Prouty
Bennett Inouye Ribicoff
Boggs Jordan, N.C. Salinger
Brewster Jordan, Idaho Saltonstall
Byrd, W. Va. Keating Simpson
Carlson Kuchel Smathers
Case Lausche Smith
Curtis Long, Mo. Sparkman
Dirksen McCarthy Stennis
Dodd McClellan Symington
Dominick McGee Talmadge
Eastland McNamara Thurmond
Ervin Mechem Walters
Fong Miller Williams, Del.
Fulbright Monroney Yarborough
Hayden Morton Young, N. Dak.
Hickenlooper. Mundt
NOT VOTING-24
Anderson
Burdick
Cannon
Clark
Cooper
Cotton
Edmondson
Goldwater
Gore
Hart
Hartke
Jackson
Javits
Kennedy
Long, La.
Magnuson
Mansfield
McIntyre
Moss
Pearson
Scott
Tower
Williams, N.J.'
Young, Ohio
So Mr. MORSE'S amendment (No. 1180)
was rejected.
Mr. MORSE. Mr. President, I call up-
my amendment No. 1179 and ask that
it be stated.
The PRESIDING OFFICER (Mr.
INOUYE in the chair). The amendment
of the Senator from Oregon will be
stated.
The CHIEF CLERK. The Senator from
Oregon proposes that:
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
f1
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
OWN.
1964 CONGRESSIONAL RECORD ? SENATE
"TITLE I?DEVELOPMENT LOAN FUND
"SEC. 101. Title I of chapter 2 of part I of
the Foreign Assistance Act of 1961, as
amended, is hereby amended by striking out
section 205 thereof, which relates to the use
of the facilities of the International De-
velopment Association."
Renumber the succeeding sections of part
I, accordingly.
Mr. MORSE. Mr. President, I ask for
the yeas and nays.
Mr. FULBRIGHT. Mr. President, will
the Senator from Oregon yield before
he does that?
Mr. MORSE. I am glad to yield.
Mr. FULBRIGHT. The Appropria-
tion Act carries a similar prohibition
against the lending of any money from
the Development Loan Fund to the IDA;
therefore, the adoption of the Senator's
amendment would not change what is
now the restriction in the appropriation
act.
It would remove the possibility in the
future of authority to do this but, in the
interest of saving time, I am quite pre-
pared to accept the amendment. I am
quite sure that there will be no problem.
EXPLANATION OF AMENDMENT REPEALING
SECTION 205
Mr. MORSE. Mr. President, this
amendment is a simple one which needs
little explanation. It would repeal sec-
tion 205 of the Foreign Assistance Act of
1961, as amended, which authorizes the
President to lend up to 10 percent of the
Development Loan Fund money avail-
able under title I to the International
Developmbnt Association, commonly
known as the IDA. We understand that
no use has as yet been made of this
authority, and there doubtless will be
those who will say that this is an inof-
fensive provision which might well be
left untouched. My position, on the
other hand, is that this authority is a
potentially dangerous one?no more to
be ignored than the so-called "lonesome
end" on a football field. I warn my col-
leagues that this section is a real
"sleeper" which could come to life with
startling rapidity.
Just on the face of it, this authority
to transfer money to the IDA seems
wholly unnecessary. At the very begin-
ning of this Congress a 'new replenish-
ment of IDA funds was approved by the
narrowest of margins. My colleagues
surely will remember that only about
half a dozen votes spelled the difference
between approval and defeat in the Sen-
ate. Even more significantly they
should remember with some chagrin
that the proposal to make an additional
$312 million available to the IDA was
first rejected by the House of Represen-
tatives and then passed by a very slim
margin after one of the most vigorous
exercises in arm twisting and blandish-
ment ever performed by the executive
, branch of our Government. And so the
IDA is amply furnished with American
taxpayers' money for the next 3 years of
its existence. ?
But this is not all. The World Bank,
which has accumulated reserves amount-
ing to almost a $900 million figure by
making loans on a sound business basis,
has recently decided to make some of its
future surplus available to its affiliate,
the IDA. It is understood that some-
thing on the order of $50 million a year
may well be transferred to the so-called
lending association to support activities
which may best be described as barely
disguised grants. In this connection, it
might be noted that, while the IDA theo-
retically assists all the less developed
countries, the great majority of the funds
made available to the Association have
gone to India and Pakistan.
By normal standards, it would thus
seem that the available funds are spilling
out of this overstuffed cornucopia.
However, we must never underestimate
the peculiar appeal of the "South Asia
Aid Society," especially to those sup-
posedly sophisticated geopoliticians who
have woven an elaborate theoretical ar-
gument designed to prove that the battle
against communism will be won or lost
south of the Himalayas. It seems to
make little or no difference to these
theoreticians that the actual behavior
of Pakistan and India over the last sev-
eral years does nothing but refute the
validity of this elaborate doctrine. I
for one see no end to the process of
pouring hard money into this extremely
soft area.
Now we will 'have the argument that,
since so much money is readily available
to the IDA over the next several years,
section 205 of the Foreign Assistance Act
surely will not be used and can there-
fore do no damage if left in the legisla-
tion. I would accept half this argu-
ment?for it is quite true that more than
adequate funds are available to the IDA.
The second part of the argument I re-
ject as nothing more than a Trojan
horse. In my opinion, there is a very
real danger that this supposedly mori-
bund authority could spring to life in
the context of our efforts to place our
own development lending on a sounder
basis. To the degree that we succeed in
tightening the lending terms to govern
operations under title I of the act, we
are likely to find the AID people seek-
ing to circumvent the harder terms by
making some of the loan money avail-
able to the IDA, which operates on the
softest basis of all international lend-
ing agencies.
Of course, it will be stated with great
emphasis and sincerity on the part of
the executive branch that they would
not dream of seeking to try an end run
around the will of Congress. But the
only valid argument that can be made
in support of this assurance is that sec-
tion 205 is basically meaningless and will
not be invoked. If this is so, then it
can do no harm whatsoever to our aid
program if the authority in question is
repealed. Frankly, all our experience
with the aid program supports my con-
tention that there is great danger in ex-
posing the executive branch to tempta-
tion and to expect it not to succumb.
Mr. President, I believe that we will
be doing our constituents and the na-
tional interest a great favor by removing
this temptation through deletion of sec-
tion 205 from the Foreign Assistance
Act.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Oregon.
18217
The amendment was agreed to.
The PRESIDING OFFICER. The bill
is open to further amendment.
Mr. MORSE. Mr. President, I call up
my next amendment, No. 1182, and ask
that it be stated.
The PRESIDING OFFICER. The
amendment of the Senator from Oregon
will be stated.
The CHIEF CLERK. On page 9, between
lines 8 and 9, it is proposed to insert
the following new subsection:
(g) Add the following new section at the
end thereof:
"SEC. 513. CERTIFICATION OF RECIPIENT'S
CAPABILITY.?(a) Except as provided in sub-
section (b) of this section, no defense arti-
cles shall hereafter be furnished to any coun-
try or international organization under the
authority of this Act (except under the au-
thority of section 507) unless the chief of
the appropriate military assistance advisory
group representing the United States with
respect to defense articles used by such
country or international organization or
the head of any other group representing
the United States with respect to defense
articles used by such country or interna-
tional organization has certified in writing
within six months prior to delivery that the
country or international organization has the
capability to utilize effectively such articles
in carrying out the purposes of this part.
"(b) Defense articles included in approved
military assistance programs may be fur-
nished to any country or international or-
ganization for which the certification re-
quired by subsection (a) of this section can-
not be made when determined necessary and
specifically approved in advance by the Sec-
retary of State (or, upon appropriate dele-
gation of authority by an Under Secretary
or Assistant Secretary of State) and the Sec-
retary of Defense (or, upon appropriate dele-
gation of authority by the Deputy Secretary
or an Assistant Secretary of Defense). The
Secretary of State, or his delegate, shall make -
a complete report to the Speaker of the
House Of Representatives and to the Com-
mittee on Foreign Relations and the Com-
mittee on Appropriations of the Senate of
each such determination and approval and
the reasons therefor."
Mr. MORSE. Mr. Presidentj ask for
the yeas and nays.
Mr. FULBRIGHT. Mr. President, will
the Senator from Oregon yield before he
does that?
Mr. MORSE. I am glad to yield.
Mr. FULBRIGHT. I believe that this
Is a good amendment. In the adminis-
tration of the military assistance pro-
gram, it requires certification of the
capability of a country to utilize effec-
tively the assistance to be furnished. I
believe that it is a good amendment.
Personally, I am in favor of it. The ad-
ministration objected to it mainly be-
cause it was felt to be in derogation of the
dignity and rights of the Secretary of De-
fense. But this is one area in--which
there has been substantial maladminis-
tration under the military program, and
I am willing to accept the amendment,
of which I approve.
Mr. MORSE. I appreciate that 'very
much, but I should like to explain the
amendment.
EXPLANATION OF AMENDMENT REQUIRING
CERTIFICATION BY MAAG CHIEF
Mr. President, the source of this
amendment is the General Accounting
Office. I have already read 'excerpts
from the GAO report on "Unnecessary
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18218 CONGRESSIONAL RECORD ? SENATE
or Premature Procurement of Sidewinder
Missile Training Systems and Their
Delivery to Foreign Countries Under the
Military Assistance Program." .
It concluded:
We have recommended to the Secretary of
Defense that these regulations be strength-
ened by requiring that future deliveries of
major end items included in approved mili-
tary assistance programs be made only upon
a written certification by the chief of the
Military Assistance Advisory Group based on
a specific determination that the recipient
country has the necessary capability to effec-
tively absorb, maintain, and 'utilize the item
to be delivered.
We believe that such a certification re-
quirement would encourage a current reap-
praisal of the need for the equipment and
the country's capability to maintain and
utilize it before it is delivered and would help
to prevent future deliveries of military assist-
ance program material in excess of the coun-
try's capability to effectively absorb, main-
tain, and utilize the items delivered. Mili-
tary assistance program material has con-
tinued to be delivered for a number of years
to countries which cannot effectively absorb,
maintain, or utilize the equipment and has
been the subject of numerous reports to
.3he Congress and the Secretary of Defense,
even though during that time the Military
Assistance Advisory. Groups have been
charged with the responsibility of preventing
this from occurring. We therefore believe
that affirmative action by the Military As-
sistance Advisory Group chief before delivery
should be required. In view of the position
of the Department of Defense with respect
to this matter, the Congress may wish to
consider the enactment of legislation requir-
ing additional safeguards before delivery of
military assistance program material. We
shall be pleased to assist in drafting such
legislation if desired.
The General Accounting Offibe not
only volunteered its help in preparing
this legislative requirement, but last fall
it sent a further memorandum on the
subject to the Senate Foreign Relations
Committee. This memorandum is the
only speech I shall need to support the
case. It reads as follows:
INEFFECTIVE MAINTENANCE AND UTILIZATION
OF EQUIPMPNT FURNISHED TO FOREIGN
COUNTRIES UNDER THE MILITARY ASSISTANCE
PROGRAM
? Our reviews have disclosed numerous in-
stances where material amounts of military
equipment have been provided to foreign
countries which is not being effectively main-
tained and utilized. We have identified the
major contributing factors to this deficiency
to be (1) programing and delivery of equip-
ment by the United States primarily for
political considerations, to recipient coun-
tries which did not have the capabilities to
effectively maintain and utilize it, and (2)
delivery of equipment without adequate
consideration of the recipient countries'
capabilities to effectively maintain and
utilize it. Following are a few examples of
these deficiencies which have been included
in our reports. ,
PROGRAMING AND DELIVERY OF EQUIPMENT PRI-
MARILY FOR POLITICAL CONSIDERATIONS
1. A recent review in a European country
disclosed that aircraft, aircraft missiles and
related equipment valued at over $8 million
had been programed and substantially de- .
livered although the necessary capability to
maintain and utilize the equipment did not
exist. At the time of our review, two-thirds
of the F-86F aircraft delivered were inop-
erable due to the absence of proper main-
tenance and trained pilots were available for
only half of the aircraft delivered. In this
case the Department of Defense told us that
political considerations involving base rights
became the overriding consideration leading
to the programing and delivery actions.
2. In one Far East country, our reviews
disclosed that the annual military assistance
programs did not appear always to have
motivated by military considerations and had
been developed without adequate knowledge
of the forces being supported, the needs of
these forces, or the military supplies already
delivered. Substantial amounts of equip-
ment were delivered to this country which
could not be utilized by the country forces.
The Department of Defense informed us that,
so long as the country remained basically
non-Communist, military aid should be con-
tinued in spite of the numerous difficulties
involved and that, while the underlying basis
for all aid to this country was admittedly
political, the maintenance of internal secur-
ity, which was the primary mission of the
army, is fundamentally a military task and
the justification of the military assistance
program in this instance was made on that
basis.
3. Equipment valued in excess of $400 mil-
lion has been delivered to a European coun-
try although there are no agreed roles or mis-
sions for the country forces. Our reviews of
the military assistance program in this coun-
try have continually disclosed ineffective
maintenance and utilization of substantial
quantities of military items. Following are
a few of the examples disclosed in our re-
ports.
(a) Aircraft values at $9 million were de-
livered, although the country was unable to
effectively utilize the aircraft previously
delivered.
(b) Tactical air navigation (TACAN)
equipment valued at about $2 million was
delivered, although the country could not
use the equipment, because, first, the neces-
sary ground-based equipment for its opera-
tion was not available; second, the country
lacked funds for installing the equipment;
and third, airborne installation kits essen-
tial to the use of TACAN were not available
from U.S. Air Force stock.
(c) Equipment for a low-frequency trans-
mitter system, valued at about $180,000, was
delivered, although the country air force
had not decided how or where it would use
the system.
(d) Equipment valued at about $12 mil-
lion had been programed or recommended
for programing for army schools although
similar equipment had been programed for
units of the military forces.
The programing and delivery of equipment
to this country under the military assistance
program was directly related to base rights
commitments, and military items were deliv-
ered at the request of the country, although
the capability of the country to effectively
maintain and utilize the equipment did not
exist.
DELIVERY OF EQUIPMENT IN EXCESS OF COUN-
TRIES' CAPABILITIES TO EFFECTIVELY MAIN.;
TAIN AND UTILIZE rr
1. Missile system equipment valued at ap-
proximately $25 million was delivered to Eu-
ropean countries and was not in use or was
in use but had a limited readiness. The
equipment had been on hand as much as 13
months more than the period of time nor-
mally required for emplacement and check-
out after delivery. Our review disclosed that
the ineffective utilization of the equipment
resulted because at the time the United
States delivered this equipment (a) perma-
nent launching sites were not available, (b)
related equipment at NATO installations re-
quired to attain the full operational capa-
bilities of the equipment delivered by the
United States was lacking, and (c) a suf-
ficient number of support personnel had not
been provided by the recipient country.
2. Our reviews of the maintenance and
supply support of Army equipment fur-
?????
August 10
fished to Far East countries disclosed that in
one country almost one-fifth of the tanks
delivered under MAP were unserviceable or
deadlined, one-third of the 1,100 vehicles
in two divisions were considered to be un-
serviceable and in no condition for a planned
field maneuver, and that 38 percent of the
radio communication equipment in one
country had an effective range of only one-
third to two-thirds of that for which it was
designed.
3. In one Near East country, we found that
at the time of our review more than 2,000 of
about 6,900 combat and combat-support ve-
hicles were inoperable, about 50 percent of
the jet aircraft in one of the two Air Force
fighter wings were out of commission for
lack of parts and had been grounded over
an 8-month period, and shortages of gasoline
had precluded full utilization of equipment.
4. In one country our review disclosed that
Air Force radio sets valued at about $3.3
million had been programed and that a large
portion of this equipment which had been
delivered was not being used because the
necessary installation and ancillary equip-
ment had not been delivered. In this same
country, we found that $2.2 million worth of
ammunition had been on hand for over 18
months although the related weapon had
been deleted from the program and never
delivered.
5. In four Western European countries-we
found that about $4.4 million worth of mis-
sile system mobility equipment had been
delivered which could not be used because
related equipment required to achieve a
mobile capability for the missile systems had
not been furnished. In these same coun-
tries we identified about $900,000 worth of
airborne electronic equipment on hand
which could not be installed because related
modification kits and other equipment was
not available.
6. Our review of delivery and utilization of
tactical air navigation?TACAN?equipment
disclosed that $12 million worth of this
equipment had been delivered to foreign
countries although the equipment cold not
be used by the recipient countries because
the related installation kits were not pro-
vided.
'7. Millions of dollars worth of equipment
and spare parts had been unnecessarily de-
livered to foreign countries under the mili-
tary assistance program. The major causes
of this inefficient and uneconomical use of
funds available for the military assistance
program are the failure of the Department of
Defense to (a) establish the validity of re-
quirements, and (b) take timely action to
cancel or suspend delivery of equipment
or spare parts which become excess due to
changes in requirements. Following are a
few of the numerous examples contained in
our reports which have been issued to the
Congress.
Excess equipment and supplies, valued at
over $5.5 million, delivered because out-
standing orders which were either excess to
revised requirements or likely to be excess
due to anticipated changes in requirements
were not canceled or suspended.
About $60 million worth of Air Force sup-
port equipment programed or delivered al-
though a firm and reliable basis for determ-
ining the country needs for such equipment
had not been established.
United States committed as much as $9
million in excess of amounts necessary to
furnish spare parts and modification kits for
advanced weapons for the mutually agreed-
upon period of time.
?
Mr. President, I am ready for the vote.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Oregon.
The amendment was agreed to.
The PRESIDING OFFICER. The bill
is open to further amendment.
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
.10
1964
CONGRESSIONAL RECORD ? SENATE
Mr. MORSE. Mr. President, I call up
my amendment No. 1181 and ask that it
be stated.
The PRESIDING OFFICER. The
amendment of the Senator from Oregon
will be stated.
The CHIEF CLERK. It is proposed by
Mr. MORSE on page 1, between lines 6
and 7, to insert the following:
TITLE I?DEVELOPMENT LOAN FUND
SEC. 101. Section 201 of the Foreign Assist-
ance Act of 1961, as amended, which relates
to the Development Loan Fund, is amended
by adding at the end thereof the following
new subsection:
"(g) Not to exceed 25 per centum of the
funds available for any fiscal year for mak-
ing loans under this title may be used dur-
ing any such fiscal year for loans for any
'purpose other than for specific develop-
mental projects."
Renumber the succeeding sections under
part I, accordingly.
On page 4, lines 5, 6, and 7, strike out
"Section 252 of the Foreign Assistance Act
of 1961, as amended, which relates to the
Alliance for Progress, is amended" and insert
in lieu thereof the following: "Title VI of
chapter 2 of part I of the Foreign Assistance
Act of 1961, as amended, which relates to
the Alliance for Progress, is amended as
follows:
"(a) Amend section 251, which relates to
general authority, by adding at the end
thereof the following new subsection:
"(h) Not to exceed 10 per centum of the
funds available for any fiscal year for making
loans under this title may be used during
any such fiscal year for loans for any pur-
pose other than for specific developmental
projects.
"(b) Amend section 252, which relates to
authorization,".
Mr. MORSE. Mr. President, I ask for
the yeas and nays.
The yeas and nays were ordered.
EXPLANATION OF AMENDMENT RESTRICTING
NON-PROJECT LOANS
Mr. MORSE. Mr. President, last year
I offered an amendment that sought to
curb the use of Alliance for Progress
funds for balance-of-payment loans and-
budget support in Latin America. That
amendment failed to pass, but it did re-
ceive 31 votes. Since this was the first
time that a vote was taken in the Senate
on the practice of making general-pur-
pose loans as opposed to specific project
loans, I would have thought that so large
a number as 31 Senators voting for the
restriction would have been a warning
signal to the Agency for International
Development.
But it seems to have made no impres-
sion whatsoever.
This year, the House Foreign Affairs
Committee, in. both the majority and
minority reports on the foreign aid bill,
again warned AID against the use of
loan funds for unspecified purposes.
The majority report states:
In general, the committee recognizes that
whenever the administrators of the aid pro-
gram are convinced that the financing of
commodity imports is essential, it is better
to finance such imports with loans rather
than grants.
Nevertheless, the committee believes that
countries which progress to the point where
they qualify for large development loans
should be encouraged to assume increasing
responsibility for financing their imports,
No. 155 8
except imports related to projects for which
loans are made.
There is a danger that dependence on the
United States for such financing could re-
sult in levels of consumption higher than the
recipient could normally sustain and could
encourage unsound financial and monetary
practices.
Mr. AIKEN. Mr. President, will the
Senator yield?
Mr. MORSE. I yield.
Mr. AIKEN. Is this amendment what
is popularly known as the antijuggling
amendment?
Mr. MORSE. Some call it antijug-
gling. I call it anticorruption.
Mr. AIKEN. Antimonkey business,
perhaps?
Mr. MORSE. That would be a good
description. It is a little softer than
mine.
Mr. AIKEN. It seems to be a rea-
sonable amendment, unless someone can
explain why it would not be so.
Mr. MORSE. Mr. President, That is
the language of the majority of the
House Foreign Affairs Committee. The
minority had much more to say on the
matter. It listed "program" loans as
having been made to Tanganyika in the
amount of $1 million, Tunisia $10 mil-
lion, India $275 million, Pakistan $100
million, Turkey $70 million, Chile $40
million, and Colombia $15 million up to
the date of the report. That is a total
of $511 million. Since the report was
published, at least one more large "pro-
gram" loan has been made to Brazil in
the amount of $50 million.
The minority views continue:
These loans do not require the same de-
gree of study for feasibility?technical, fi-
nancial, or economic?that are required for
a project loan to get the necessary approval
under section 611 of the act. This section
requires cost estimates, engineering surveys,
and financial and other plans before loan
funds can be obligated.
Further, the United States does not re-
ceive credit or become identified with assist-
ance under program loans because they are
made to the government which, in turn, al-
locates the dollar exchange to importers for
commodity import requirements.
In summary, every effort should be made
to curtail program loans because (a) they
require less detailed justification than proj-
ect loans and, therefore, can be used to ab-
sorb loan funds when carefully worked out
projects are not forthcoming; (b) there is
no visible way to identify the United States
with assistance provided through program
loans; (c) a country receiving a program
loan can divert similar amounts of its for-
eign exchange to luxury-type import items
or for lower priority needs; and (d) al-
though imports with these loans are re-
quired to be from the United States, the
level of American imports do not increase
comparatively, which indicates that some of
the countries merely divert imports with
equal amounts of foreign exchange of other
sources.
At the time of this report, $456 million
had been lent out of the Development
Loan Fund for program loans, and $55
million out of Alliance for Progress loan
funds, plus $50 million out of the con-
tingency fund, which went to Brazil.
Two-thirds of all money appropriated
last year for development loans had been
lent for unspecified, general commodity
18219
financing. . About 15 percent of Alliance
for Progress loan funds went for the
same purpose. But in the case of Latin
America, budget support and balance of
payment help comes more from non-
Alliance funds, primarily the contin-
gency fund and supporting assistance.
As I stated, in the past several years,
all supporting assistance is, after all is
said and done, really indirect military
aid.
As the House committee minority
makes so clear, this assistance in no way
is identified with the United States; this
assistance cannot be related to any proj-
ect or program by the people of the re-
ceiving country. How much good have
we done the United States among the
people of Brazil with our $50 million loan
to its Government? None. The money
will never show up in the way of life of
the ordinary Brazilian.
What we did with that $50 million was
to buy a little political favor from its
current political leaders. That is what
these program loans are for. It bails
them out a while longer. It postpones
the day when critical and sometimes
painful decisions have to be taken on
their home front. It delays the time
when they must go before their own vot-
ers and lay down the facts of life. No
politician likes to do that. So they come
to the U.S. Treasury instead. That way
we hope to create a little obligation on
their part to favor the United States in
international matters.
That is why in my individual views I
said that program loans do no more than
patch over and perpetuate the lack of
economic development.
Brazil and Turkey have already de-
faulted, in effect, on loans by obtain-
ing moratoriums even as we extend them
new soft loans. There is every prospect
that debt renegotiation with Argentina
will begin soon, if it has not already be-
gun.
Yet we go on and on making new easy
credit available to them.
The prevalence of this kind of loan
makes a mockery of the advertisements
AID and the State Department make
about foreign aid helping farmers to
grow better crops and laborers to build
better homes.
At the time the recent Brazilian loan
was announced, it was also announced
that the $50 million was in addition to;
"understandings now being reached for
the financing of various specfic projects
designed to promote the economic devel-
opment and social progress of the Bra-
zilian people."
This $50 million loan is at 2 percent
interest for 40 years. We have been
encouraging Brazil for years and years.
We have been urging upon Brazil to do
something about its inflation. We have
,.been urging Brazil to come forward with
a plan, which she is obliged to do under
the action at Punta del Este, as to what
she will do with respect to internal re-
forms and internal programs. Alliance
for Progress funds are supposed to con-
tribute to the fulfillment of the country
plan.
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18220 CONGRESSIONAL RECORD ? SENATE
Mr. President, Brazil still has not sub-
mitted a satisfactory plan. She has
made gestures, but she has submitted no
all-encompassing plan. We ought to
stop this type of loan. We ought to say,
"Come forward now with an economic
project that is sound, one that will be of
help to your people, and we shall help you
with that and release your own money
for use in connection with your own fis-
cal problems at a governmental level."
So I say that this loan was made not
as a result of the steps Brazil had taken
to curb inflation and to live within her
means, but to encourage Brazil to take
those steps. A month later, on July 26,
the New York Times reported that the
Brazilian Central Government's statis-
tics showed the cost of living rose more
than 40 percent in the first 6 months of
this year, and that the Branco regime
had an operating deficit in its national
budget of nearly $600 million. I ask
unanimous consent to have these two ar-
ticles from the New York Times dated
June 25, 1964, and July 26, 1964, printed
at this point in the RECORD.
There being no objection, the articles
were ordered to be printed in the RECORD,
as follows:
[From the New York Times, June 25, 1964]
U.S. GRANTS $50 lks
_riiioisr LOAN
WASHINGTON, June 24.?The United States
granted Brazil a $50 million loan today to
support the reform programs of the new
government.
This was the first major loan given to the
regime of President Castelo Branco. It dem-
onstrates the faith of President Johnson's
administration in Brazil's determination and
capacity to combat inflation, rebuild her
shattered finances, and institute rational eco-
nomic policies.
In announcing the loan, concluded under
the Alliance for Progress program, the ad-
ministration noted that "the Brazilian Gov-
ernment is formulating a comprehensive pro-
gram of development, stabilization, and re-
form which can serve as a basis for later
discussions with international institutions
and the Government of the United States
and other friendly countries of Brazilian
needs for external assistance."
The announcement emphasized that the
loan, for a 40-year period at the unusually
low interest of 2 percent, is in addition to
"understandings now being reached for the
financing of various specific projects designed
to promote the economic development and
social progress of the Brazilian people."
The loan marked the resumption of gen-
eral 'U.S. lending to Brazil after a pause
of almost a year. Around the middle
of 1963 the United States became convinced
that the regime of President Goulart could
not properly utilize financial assistance be-
cause of its refusal to take adequate anti-
inflationary and other stabilization measures.
Today's loan was announced as Carlos La-
cerda, Governor of Guanabare, State and one
of the principal leaders of the April revolu-
tion, appealed for U.S. understanding of the
revolutionary situation in his country.
Speaking at the National Press Club here,
he said the new government had been try-
ing to find competent, honest people to ad-,
minister its affairs after the chaos of the
Goulart regime.
[From the New York Times, July 26, 1964]
REGIME IN BRAZIL SCORED ON PRICES?LAcERDA
SAYS CONFIDENCE Is UNDERMINED By INFLA-
TION
(By Juan de Onis)
RIO DE JANEIRO, July 25.?President Hum-
berto Castel() Branco embarked today On his
newly extended term of office under heavy
political fire because of rising prices.
The main criticism of the Government
came from Gov. Carlos Lacerda of Guanabara
State, one of the leaders of the April 1 revo-
lution that overthrew President Joao Goulart
and brought Gen. Castelo Branco, then the
army chief of staff, to the Presidency.
Mr. Lacerda said a survey of prices in his
state showed that they had shot upward
since the revolt. "As a consequence, confi-
dence in the revolution has been profoundly
eroded in 3 months," he said.,
Rising unemployment in Belo Horizonte,
capital of Minas Gerais State, and in Sao
Paulo was also reported. The iron and steel
industry was showing signs of a recession,
with cutbacks in production. Automobile
output also was down and household appli-
ance manufacturers reported large unsold
stocks.
The Central Government's statistics show
that the cost of living rose more than 40 per-
cent in the first 6 months of this year on
the momentum of an inflation that raised
prices more than 80 percent last year.
Halting inflation is the principal preoccu-
pation of the Castelo Branco regime and
efforts are being made to reduce the Govern-
ment's operating deficit, regarded as the
main cause of the inflation. This year's
deficit is estimated at nearly $600 million.
Partly to give the Government more time
to cope with the Problem, the congress this
week added 14 months to Mr. Castelo
Branco's original period in office. Originally
it was to have completed Mr. Goulart's term
ending January 31, 1966.
Mr. Castelo Branco will now remain in
power until March 15, 1967, and the election
originally scheduled for October 1965 will be
postponed to December 1966. This decision
was taken by the congress over Mr. Castelo
Branco's opposition, but with the support of
Brazil's military leaders.
Mr. Lacerda, noted for his opposition to
Mr. Goulart's leftist government, was bitterly
disappointed by Congress' decision. He had
hoped to run for President in the election
scheduled for next year, and he lashed out
at the Congress.
It is widely accepted that Mr. Lacerda is
trying to bring down the present cabinet
and, install a government alined with his
views. Prices constitute the most vulnerable
area for this cabinet, whose economic and
financial policies are largely determined by
the Planning Minister, Roberto Campos.
Steel executives advised the Labor Minis-
try this week that they would not fulfill a
contract signed with 50,000 workers in Minas
Gerais and Sao Paulo during the Goulart
regime. This provided for quarterly adjust-
ments that would now require the industries
to pay a minimum wage of 70,000 cruzeiros
($55) a month. The regional minimum
wage is 40,000 cruzeiros ($32).
The executives said the contract could be
met only through increases in iron and steel
prices.
Roman Catholic priests active in union
organization in Pernambuco, the sugar
region of Brazil's northeast, warned sugar-
mill operators that there would be a strike
unless a minimum wage set by the former
government was respected.
On another front, respresentatives of
Brazilian university students elected new
officers today for the National Union of Stu-
dents, which the Education Minister had
threatened to dissovle.
The delegates also resolved to reconstruct
the union, which had been controlled by
militant leftists. This indicated limited
support of the uprising that ousted Mr.
Goulart.
The students met in defiance of the Educa-
tion Minister, Suplicy de Lacerda, who had
proposed that the autonomous student orga-
nization be replaced by a student council
under control of the ministry.
AIM
August 10
Virtually all the delegates, who came from
12 States, were opposed to the former leader-
ship of the national union, which they co4-
tend was antidemocratic and alienated from
the mass of students.
Mr. MORSE. Mr. President, at the
present time we are using two-thirds of
the development loan money for inter-
governmental loans to finance com-
modity imports of a general nature. I
wish to repeat that sentence, because I
want to show Senators that in my judg-
ment this is one of the most serious prob-
lems in the whole AID program calling
for policy reform. I ask Senators to lis-
ten to the sentence again:
At the present time we are using two-
thirds of the development loan money
for intergovernmental loans to finance
commodity imports of a general nature.
They do not provide people-to-people
aid.
They do not coincide with what Sena-
tors have heard me plead for for several
years--a project-to-project approach to
foreign aid instead of a government-to-
government approach.
I wish to see the American taxpayers'
dollars invested in dams, refineries,
plants, and other economic projects that
will help to create jobs in parts of the
world that are characterized by unem-
ployment, or employment at wages that
cannot maintain a family in health and
decency. I wish to do something for
people.
Mr. DOUGLAS. Mr. President, will
the Senator yield?
Mr. MORSE. I yield.
Mr. DOUGLAS. The Senator from
Oregon has made a startling statement.
As I understand, he said that last year
approximately $560 million was loaned
by us to foreign governments for unspec-
ified purposes.
Mr. MORSE. That is correct.
Mr. DOUGLAS. About $50 million of
that was to meet the deficit of the Bra-
zilian Government. Can the Senator
from Oregon throw any light on , the
question of the purposes for which the
other $510 million was loaned?
Mr. MORSE. No.
Mr. DOUGLAS. The Senator from
Oregon is a member of the Committee on
Foreign Relations, is he not?
Mr. MORSE. Yes.
Mr. DOUGLAS. Did the administra-
tor of AID, or any of his assistants, item-
ize how the $510 million was distributed
and for what purposes?
Mr. MORSE. There may be some
itemization in the three thick books that
were presented to us for study. But I
gave the Senator an honest answer. I
do not know what the itemization might
be. If it is available, perhaps the chair-
man of the committee might respond.
Mr. DOUGLAS. I wonder if the chair-
man of the Committee on Foreign Rela-
tions could answer the question. For
what purposes were the $510 million
loaned to the governments of foreign
countries? Is my impression correct that
this is primarily related to Latins Amer-
ica?
Mr. MORSE. No; most of it was lent
elsewhere. India received $275 million,
Pakistan $100 million, and Turkey $70
million in fiscal year 1964. Tunisia and
Tanganyika also received smaller pro-
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
1964 CONGRESSIONAL RECORD ? SENATE
gram loans. In Latin America, Chile re-
ceived $40 million, Colombia $15 million,
and Brazil $50 million this last fiscal
year. The presentation for fiscal year
1965 tells very little about the purposes
of these loans that will be made in fiscal
1965.
Mr. FULBRIGHT. The major pur-
pose of the Alliance for Progress pro-
gram was to support overall plans for the
economic development of the countries
of Latin America. It was intended that
those countries should bring about cer-
tain reforms within their economies. It
was called a self-help program. We
make the program loans available only
when there is a commitment by the re-
spective countries to engage in certain
kinds of reforms within their countries.
' As the Senator has heard, in some
cases those reforms are in the nature of
tax reforms, in some cases they are in the
nature of land reforms, and so on. Pro-
gram loans were the major tool that we
had for encouraging the respective coun-
tries to bring about reforms. The agency
does not make the program loans with-
out any conditions as to how the money
shall be used. When a loan is negoti-
ated, the purpose for which it is to be
used is well Understood.
Mr. DOUGLAS. Has that purpose
been stated to the Committee on Foreign
Relations?
Mr. F1TLBRIGHT. Certainly.
Mr. DOUGLAS. What are the pur-
poses?
Mr. FULBRIGHT. I do not have in
mind the particular purpose of all loans,
if that is what the Senator means. But
that is obtainable in full. We have at
hand the general statements about the
nature of the loans. Some are often in-
formally called balance-of-payments
loans. In a sense that is what they are.
They provide the basis for the develop-
ment of private industry in most of the
countries involved. They are intended
to finance the purchase of spare Parts,
machinery, equipment, and so on, from
this country through private enterprise.
The project loans which were men-
tioned by the Senator from Oregon are
usually provided for a dam, a railroad,
a dock, or something of that kind, and
they usually are of a governmental na-
ture. Year after year the committee and
the Congress have urged private enter-
prise to come into the picture. That is
accomplished primarily through program
loans, which make available to private
enterprises in each of the countries the
resources to enable them to purchase
needed commodities. There is agreement
as to which areas of the economy the
loans are to be used for, but they are not
Intended to be used for the building of a
dam or any specific tangible project.
Mr. DOUGLAS. Mr. President, will
the Senator from Oregon permit me to
comment on that statement?
Mr. MORSE. Certainly.
Mr. DOUGLAS. I have always thought
that the Alliance for Progress included
primarily, amongst the reforms, the de-
velopment of education, the building of
schools, the building of houses, the car-
rying on. of health work, and the pur-
chase of large estates for distribution
into small holdings. It seems to me that
projects of that nature could be made
very specific, and that it would not be
necessary to make a general loan for such
purposes. The loan could specify the
purposes for which it was to be made.
The Government could act as the inter-
mediary, but we would know for what
purpose the money was being spent. But
the facts seem to be that of the loan
funds devoted to Latin America in fiscal
year 1964?a total of approximately $425
million, of which $50 million came from
contingency funds?$105 million, or
about one-quarter, was assigned to gen-
eral Government loans with no specific
conditions attached that the money must
be spent for better schools and the. other
fundamental reforms.
Mr. MORSE. That is what I am ask-
ing for. I see one of my teachers on the
Foreign Relations Committee, the Sena-
tor from Vermont [Mr. AIKEN], smiling
as he listens to the present debate. The
Senator from Vermont has exercised a
great deal of influence on me, whether
he knows it or not, with regard to the
position he has taken from time to time
in respect to the Alliance for Progress
program. I am endeavoring merely to
carry out a percentage restriction which
I believe would reduce the amount of
money available for general loans gov-
ernment-to-government. I would pro-
vide a better opportunity for obtaining
money the expenditure of which would
be specified for specific projects. As the
Senator from Illinois knows, the problem
that we have as Senators is that when
we seek to obtain loans and grants for
public works developments in our own
States?and I am all for the procedure?
we must show a benefit-cost ratio?and
we should have to show it. We have to
show that the project is desirable, be-
/ cause we are dealing, we say, with tax-
payers' money. We certainly are. But
AID is dealing with taxpayers' money.
By this policy amendment?and I am of-
fering my policy amendments today in
order to have some votes on policy first
before coming to specific money amend-
ments?I am seeking to place some
checks on AID as well as on Brazil, Ar-
gentina, and some of the other countries.
Mr. AMEN. Mr. President, will the
Senator yield?
Mr. MORSE. I yield to the Senator
from Vermont.
Mr. AIKEN. If the Senator could get
the details of the situation accurately,
he would find that the borrowing nation
will use the money borrowed from the
United States for purposes for which
it would ordinarily use its own money,
and that, in turn, releases its own money
to pay off creditors, some of which may
be in the United States, some in Europe,
some here, there, and everywhere. That
is what I meant when I asked the Sena-
tor if this was the "antijuggling amend-
ment."
Mr. MORSE. There is no question
about it.
Mr. AIKEN. I am sure, if the Senator
would get to the bottom of this, he would
find that that is what happens.
Mr. MORSE. The Senator will recall
that in the past few years we had a dis-
cussion about this type of loan that was
made to Argentina. When we dug into
18221
the matter, I very well remember some
of the comments of the Senator from
Vermont. When we dug into it we found
that the money of U.S. taxpayers that
went into Argentina, under an unchecked
procedure for a loan, was used to pay, off
American creditors.
Mr. DOUGLAS. Mr. President, if I
may interject, what is that?
Mr. MORSE. Just what I said.
Mr. DOUGLAS. Does the Senator
mean that we loaned money to Argen-
tina which was not used for the benefit
of the people of Argentina?
Mr. MORSE. It might be said that it
was for their benefit. It enabled them
to pay American creditors for goods im-
ported in the past. I am talking now
about a policy that does not provide for
adequate checks. I do not believe there
should be allowed the use of money out
of the President's contingency fund or
some other source to make this kind of
loan to a government, with which the
government in turn uses the money tb
pay off creditors. In that case, it was
America creditors. Sometimes it is to
pay European creditors.
Mr. AIKEN. Mr. President, if the
Senator will yield further, I have great
hopes for Brazil. It is a coming nation.
It is a friendly nation. It is making
progress. The value of its currency has
improved inthe past 6 months. But the
Government of Brazil has done some-
thing else. It has abandoned the sub-
sidy which it paid previously for the use
of petroleum products. It subsidized the
use of gasoline. It has eliminated that.
A few years ago Bolivia subsidized the
use of petroleum products. It, too, has
stopped it. Nevertheless, Brazil still has
to buy great amounts of petroleum and
it has to be paid for.
Mr. MORSE. I have great hopes for
Brazil: too. My amendment would afford
her more hope. The amendment would
provide that the government must ask
for loans for specific projects. If they
are sound, the committee, on which the
Senator from Vermont also serves, will
support it. I do not like unchecked
power anywhere. I do not like the mak-
ing of loans in a pig-in-a-poke manner,
when we do not know what the purposes
of the loans are, when we are expected
to offer the money to them and let them
spend it as they desire.
Mr. AIKEN. The Senator knows
pretty well what it is used for. When
we lend money for the purpose of im-
proving the lot of the people, we are
entitled to know that it is used for that
purpose, and not used to pay off Ameri-
can or European creditors.
Mr. DOUGLAS. Mr. President, the
Senators from Oregon and Vermont ex-
cite the curiosity of those of us who are
not members of the Foreign Relations
Committee. They speak of mysterious
information that one or the other knows
about the purposes for which the $500
million has been loaned to foreign gov-
ernments for undetermined, unspecified
purposes. The Senator from Vermont
implies that a major portion of this
amount has been used not to improve the
condition of the people, but to improve
the credit standing of the country with
foreign or external creditors.
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18222 - CONGRESSIONAL RECORD ? SENATE
I have always supported the Alliance
for Progress, but I thought the money
went specifically to help the people of
Latin America. I suppose, since the
Senator from Oregon states?and the
Senator from Vermont does not contra-
dict?that a major portion of the money
goes for general purposes, it is difficult
to know where it goes, but it is generally
believed that large parts of the money
go to pay off debts previously incurred.
Mr. MORSE. We are talking about
the evil system with respect to a part of
that money. This is not the total part
of the Alliance for Progress money. I
plead for the Senator from Illinois to
continue to have faith, as the Senator
from Vermont and I have overall faith,
in the Alliance for Progress. This
amendment would eliminate a policy
that is unwise.
I criticize the use of the President's
contingency fund for this purpose.
That is why I am advocating a cut of
$50 million in the President's contin-
gency fund. The contingency fund
should be used only to meet an immedi-
ate, overnight emergency affecting the
United States. It should not be used
by the President to engage in interna-
tional relations on his part. This
- money should not be used for balance
of payments, credit payments, and what
not, because the head of some other gov-
ernment says he is in an emergency, be-
cause the President of the Argentine or
Brazil is in an emergency, for example.
Let them come before us in the open and
ask for a loan for a specific purpose, and
let us pass judgment on the soundness
of the loan for that purpose.
Mr. DOUGLAS. Mr. President, will
the Senator forgive me for another ques-
tion?
Mr. MORSE. I am glad to yield.
Mr. DOUGLAS. I understand that a
loan of $50 million was made to Brazil
primarily to meet a deficit in the govern-
ment budget, or possibly to redress an
unfavorable balance of payments.
Mr. MORSE. Yes. That came from
the President's emergency fund.
Mr. DOUGLAS. Not from the specific
Latin American fund, but from the Presi-
dent's emergency fund.
Mr. MORSE. The President's, emer-
gency fund.
Mr. DOUGLAS. What about the loan
to the Argentine?
Mr. MORSE. That was to pay off
American creditors who had put the
"heat" on the President of Argentina.
Mr. DOUGLAS. What kind of credi-
tors?
Mr. MORSE. Oil creditors, shipping
creditors. There is a long list of them.
I do not recall all of them at the present
time. There was quite a "hassle" about
it at the time. Those of us protesting
it were left in the minority.
Mr. DOUGLAS. Could the Senator
insert in the RECORD the group which ob-
tained the subsidy?
Mr. MORSE. I shall try to obtain it
for the RECORD before we are finished
with the bill. The member of the staff
from the Foreign Relations Committee
assisting me will proceed to obtain it.
Mr. DOUGLAS. Chile has been op-
erating both under inflation and big
government deficits, I believe. Have
such loans been made to Chile?
Mr. MORSE. Chile received a $40
program loan a few months ago.
Mr. DOUGLAS. The Senator from
Illinois has visited two Central American
republics and two of the northern South
American republics, and he thought the
Alliance for Progress was working very
well in all four of those countries. Like
the Senator from Oregon, I am a sup-
porter of the general program, but I
was somewhat startled by the state-
ment of the Senator from Oregon,
which does not seem to be controverted in
any way, that $105 million, one-quarter
of the loan funds devoted to AID last
year, has been loaned for purposes which
none of us thought were originally in
included in the program of the Alliance
for Progress.
Mr. MORSE. That happens to be ,a
fact. I have been urging my proposals.
I have made them in the committee, too.
Mr. DOUGLAS. What was the deci-
sion in the committee?
Mr. MORSE. There was not very
much discussion of them. I made my
statement, and they were voted down.
Mr. DOUGLAS. The Senator from
Oregon has made a grave statement.
Mr. TALMADGE and Mr. LAUSCHE ad-
dressed the Chair.
The PRESIDING OFFICER. Does the
Senator from Oregon yield, and, if so, to
whom?
Mr. MORSE. I yield first to the Sena-
tor from Georgia.
Mr. TALMADGE. Is it the purpose of
the Senator's amendment to the Devel-
opment Loan Fund that the project for
which the money is to be used must be
specified and, that the money may be
used for that particular project, and no
other?
Mr. MORSE. That is the purpose of
the amendment. It requires that 75 per-
cent of the money be used for specific
projects.
I believe that is where the bad Policy
develops. It discourages them from re-
forming their own economy, so long as
they, can think they can go along and call
on Uncle Sam for help. It is pretty hard
for politicians to put the economic screws
on, instead of letting inflation continue,
and not applying drastic limitations, es-
pecially limitations that are necessary to
stop inflation, so long as they have a
good hunch that Uncle Sam will bail
them out. We are discouraging them
from adopting procedures to bring about
their own reforms.
I wish to stop the general import loans.
I wish to see our taxpayer money spent
for projects that we know have at least
some chance of helping the people them-
selves.
Mr. TALMADGE. Does the Senator's
amendment provide that the country re-
ceiving the money must put up a portion
of its own funds for each particular proj-
ect?
Mr. MORSE. No; this amendment
does not provide for that specifically.
Such a provision is not necessary to what
I am trying to accomplish in this amend-
ment.
Mr. TALMADGE. I thank the Sen-
ator. I think his amendment is a good
amendment.
August 10 -
? Mr. MORSE. I thank the Senator
from Georgia.
Mr. LAUSCHE. Mr. President, will
the Senator yield?
Mr. MORSE. I yield.
Mr. LAUSCHE. Without trying to
pass on the merits of the amendment of
the Senator from Oregon, I am obliged
to say that the testimony shows that
when a program is approved, it is done
only after there is provided a complete
description of what the program involves.
Also required is supervision of what is
being done under the program. I do not
wish to remain silent and by doing ap-
prove the statement that loans are made
without any previous knowledge of the
purpose for which they are to be used.
Mr. MORSE. Will the Senator from
Ohio tell the Senate what supervision
there was of the $50 million program loan
from the President's contingency fund?
- Mr. LAUSCHE. There may be greater
strength to the Senator's argument with
respect to the contingency fund. How-
ever, the fact is that with respect to pro-
gram loans, a plan must be submitted.
The plan is analyzed. Before any pay-
ments are made under it, It must be ap-
proved. After it is approved the AID
supervises and watches the program to
see that it proceeds as contemplated.
Moreover, the Alliance for Progress
watches what is being done in the eco-
nomic development of each of the na-
tions.
Mr. MORSE. The Senator from Ohio
may have that point of view about the
checks. I believe that the checks are
not effective, and that they have not been
protecting our interests. The loan
should be made, in the first instance, for
a specific project. That is what I am
pleading for. We should prevent so much
of the money going for general loans. All
I am doing is cutting down a provision
percentagewise.
Mr. LAUSCHE. If the Senator states
that he wishes to correct the spedifics,
that is one thing. Stating that there is
a complete absence of specifics as to
what is being done, is something else.
Mr. MORSE. I am saying that the
specifics that are called for are not suffi-
ciently restrictive to protect the Ameri-
can taxpayer. I hope the Senator will
note what I am advocating:
(g) Not to exceed 25 per centum of the
funds available for any fiscal year for making '
loans under this title may be used during
any such fiscal year for loans for any pur-
pose other than for specific developmental
projects.
What is wrong with that? They can
go up to 25 percent. What is wrong with
limiting them to 25 percent? -
On page 2 of my amendment I pro-
vide:
(h) Not to exceed 10 per centum of the
funds available for any fiscal year for making
loans under this title may be used during
any such fiscal year for loans for any purpose
other than for specific developmental
projects.
What is wrong with that? Will the
Senator tell me what is wrong with that
kind of check? We must put that kind
of check in the bill, so that the countries
will know that the sky is not the limit
when coming to the United States and
asking for additional loans. They must
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
1964. CONGRESSIONAL RECORD ? SENATE 18223
do something for themselves. If they do
not bring about inflation control, if they
do not bring about fiscal improvement,
they will continue to go along thinking
that all they need to do is to come to
Uncle Sam.
If we place a ceiling in effect, we will
help them. We must be much more
stringent on the AID people and on the
State Department than we have been
in the past. I know there will be some
negative connotations from what I am
about to say. We must be more insistent
upon policing them so far as the inter-
ests of the American taxpayers are con-
cerned.
The precise description of expected aid
to each country comes marked "Confi-
dential" and hence-it cannot be inserted
directly into the RECORD.
? But I can give Senators an idea of
the kind of information we have about
these program loans, as compared with
project loans.
In one country, for example, which re-
ceives large amounts of U.S. aid we are
told:
It is likely that AID project loans will be
made in fiscal year 1965 for power installa-
tions, mineral processing, and manufactur-
ing industries: Program loans will finance
imports of raw materials and semifinished
commodities to help maintain production
and the pace of investment.
In . another country we find that?
U.S. loans will again be made to help
finance the raw materials, equipment and
spare parts which are an integral part of
the development plan. Moreover, the bulk of
U.S. nonproject imports goes to the private
sector and is an important element in main-
taining the pace of private investment ac-
tivity. With an acceleration of the develop-
ment program, and completion of feasibility
studies for roads,-power, and water resources,
an increasing number of project loan re-
quests are expected for fiscal 1965.
Senators may say that AID officials
know what part the U.S. loan will play
in a country's general economy; but the
point I am making is that these program
loans are not and cannot be identified
with any given project. They simply
go to finance general imports.
Mr. President, at the present time we
are using two-thirds of the development
loan money for general intergovern-
mental loans They do not provide peo-
ple-to-people aid. They are purely gov-
ernment-to-government, and they seek
to influence and improve the well-being
not of the people of the recipient coun-
try, but of its ruling class.
My amendment is both a refinement
and an expansion of the amendment
which last year gained the support of 31
Senators. This time it is not confined to
the Alliance for Progress. For the De-
velopment Loan Fund it sets a ceiling of
25 percent on loan funds that can be
used for nonproject aid. It sets a ceiling
of 10 percent on Alliance for Progress
loans for nonproject aid. Even that is
very generous. It is more than I would
like to see lent for general balancing of
accounts. But it would make a start. It
would tighten the legislative guidelines.
It would restrict -the amount of "lobby-
ing" that foreign governments could' do
among American aid and diplomatic of-
ficials for untied loans.
Senators will recall that when we
passed the Hickenlooper amendments
cutting off aid to any country that ex-
propriated American investments with-
out compensation that we were accused
of "tying the hands of the administra-
tion."
But we did tie them. And the next
year the AID and State Department peo-
ple found themselves quite pleased with
the result.
It was interesting and pleasing to find
the State Department officials, includ-
ing the Secretary of State, and Mr. Bell,
Director of AID, visiting with us in the
Committee on Foreign Relations and ex-
pressing their pleasure with the way the
program had worked. The year before,
however, they had fought it. I be-
lieve that my amendment would perform
a great service for Mr. Rusk and Mr.
Bell. I believe that a year from now Mr.
Rusk and Mr. Bell? will be thanking us
again.
Someone must make the fight. We
should give the proposal a trial. If after
a year it can be shown that what I say
did not work, the present provision can
be restored. Certainly things have been
going well the way we have been operat-
ing. This proposal ought to be tried.
The congressional directive on expro-
priation left no room for quibbling with
foreign governments. It removed from
the yealin of administration discretion
the decision whether to reduce or to
end aid to such countries. It simply
said, "This is it." My amendment pro-
vides that 25 percent and 10 percent
are to be the ceiling limitations, just as
in the Hickenlooper amendment we had
a rule of finality. Foreign countries
could go to the ambassador or to the
AID officials or come to Washington to
see the Secretary of State, but they can
always say, "There is nothing we can
do about it. It is the law." I wish to
put the Secretary of State in that posi-
tion with respect to this problem.
The main foreign aid failures have re-
sulted from the failure of Congress to
make more legislative directives of the
same nature. Here is an area where
they are sorely needed, and my amend-
ment would be a start toward correcting
one of the worst abuses of foreign aid.
Mr. DOUGLAS. Mr. President, will
the Senator from Oregon yield.
Mr. MORSE. I yield to the Senator
from Illinois.
Mr DOUGLAS. It is sometimes said
that these are loans -which will ultimately
be repaid and that, therefore, there will
be no wasting of any money, assuming
the amounts will be repaid. Is it true
that the current interest terms are three-
quarters of 1 percent interest during the
first 10 years and 2 percent thereafter?
I notice the compilation in a table on
pages 42 and 43 of the report.
Mr. MORSE. Will the Senator please
restate his question?
Mr. DOUGLAS. Is it true that the
rate of interest on the Alliance for
Progress loans is three-quarters of 1
percent during the first 10 years and 2
percent thereafter?
Mr. MORSE. That is the rule.
Mr. DOUGLAS. And that the aver-
age rate of interest on development and
Alliance for Progress loans is 1.7 percent?
' Mr. MORSE. It is about 2 percent.
Mr. DOUGLAS. A little under 2
percent?
Mr. MORSE. Yes.
? Mr. DOUGLAS. Is it true that the
average rate of interest charged by other
members of the free world alliance is
5.1 percent?
Mr. MORSE. Not completely, but in
most instances. Some countries are now
beginning to negotiate lower interest
rates.
? Mr. DOUGLAS. So, on the whole,
their interest rates are?
Mr. MORSE. Much higher.
Mr. DOUGLAS. About three times
what the average rate is for Alliance for
Progress loans?
Mr. MORSE. Mich higher. That is
why I am supporting the amendment of
the Senator from Ohio [Mr. LAII5CHE]
and the Senator from South Dakota [Mr.
MuNer 1 to bring interest rates up. I
thing they are too low.
Mr. DOUGLAS. Is it true that our
loans run for 40 years?
Mr. MORSE. That is correct; in some
instances, 50 years.
Mr. DOUGLAS. Is it true that the
weighted average of Belgian loans is 7
years, and French loans 17 years?
Mr. MORSE. On the average, they
are for a shorter period than ours.
Mr. DOUGLAS. So we are making
very favorable terms?
Mr. MORSE. Oh, yes.
Mr. DOUGLAS. Frankly, I. do not
object to favorable terms. I am how-
ever concerned about the purposes for
which the loans are spent. I am shaken,
to tell the truth, by the material which
the Senator from Oregon has cited, and
which has not been contradicted:
Mr. MORSE. As the Senator knows,
I also want fair terms to be imposed, but
terms that are fair to the American tax-
payers, too. In my opinion, the interest
rate of three-quarters of 1 percent really
does not cover the cost of administering
the loans.
Mr. DOUGLAS. The Senator from
Oregon would like to have the rate made
2 percent for the initial period of 10-
years?
Mr. MORSE. At least that much.
Mr. DOUGLAS. Similar to the rate
of interest on REA loans?
Mr. MORSE. At least that much.
Mr. DOUGLAS. Mr. President, I sim-
ply say that the Senator from Oregon
has thrown down a startling and con-
vincing challenge on this subject.
Mr. MORSE. Mr. President, I yield
the floor.
Mr. FULBRIGHT. Mr. President, I
hope the Senate will not accept the
amendment. I may say, partly by way
of background, that my comments have
nothing to do with the merits of the
amendment. To the best of my recol-
lection, the amendment was not offered
in the committee. However, the sub-
ject with which it deals was discussed
at length in the committee with the ad-
ministrator, Mr. Bell.
Mr. Bell stated, and I think most per-
suasively, that such program loans are
highly essential to the development of
a country, particularly loans under the
Alliance for Progress, and for countries
like India. A big part of the aid to India
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18224 CONGRESSIONAL RECORD ? SENATE
has been in the form of program loans.
That does not mean that specific uses
were not provided; but the loans are
made to the country to be used by it
largely in the private Sector. One of
the major parts of the lending program
is the lending of money to a government
which will agree to relend it and make
it available to private industry to im-
port raw materials, machinery, and sup-
plies for the industries of the country.
That is in accordance with the overall
development plan. It has been success-
ful, according to the administration.
The administration believes that this
pending amendment would result in a
degree of inflexibility which would
greatly hamper the effectiveness of the
overall program. In my opinion, the
administration makes a good case.
The distinction between a loan to be
used to pay a debt and a loan to build
a bridge or a school is a slippery con-
cept. For example, if a school is built
directly with loan money, it relieves the
Government directly from using its ,own
money. If it uses the loan to pay off a
debt, what is the difference as compared
with paying it directly, assuming it is
a recognized, legitimate need of the
country under the specific conditions of
that time?
If a program of development is under-
taken in one of the countries, it is then
up to the judgment of our people, work-
ing with the country concerned, as to
where to put the emphasis. If a factory
or a refinery is needed?let us suppose
a fertilizer factory is needed?the ef-
ficient way to proceed is to make the
money available to the government,
which in turn can relend the money,
under conditions- specified by our AID
program for that purpose; for example,
the importation of a fertilizer plant or
any other kind of equipment. Inci-
dentally, time after time, the committee
and Congress have included policy dec-
larations to encourage the development
of the private industrial sectors of the
underdeveloped countries.
The loan to Brazil, which has been
under discussion, did not come under
this part of the program. In no way
would it have been affected by the
amendment. That money came out of a
different category. Even if the amend-
ment of the Senator from Oregon had
been in effect, that loan would not have
been affected by the amendment. It was
a loan made, we all admit, under special
circumstances, for the benefit of a new
regime, a loan which we hoped would
help to enable the new government to
survive a difficult period. It would be
used for the essentials of government.
Mr. President, I ask unanimous con-
sent to have printed at this point in the
RECORD a statement entitled "Program
and Project Loans Under the Develop-
ment Loan Fund and the Alliance for
Progress."
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
PROGRAM AND PROJECT LOANS 'CINDER THE DE-
VELOPMENT LOAN FUND AND THE ALLIANCE
POR PROGRESS
The amendment provides that no more
than 25 percent of the funds available in
any fiscal year for DIP loans and no more
than 10 percent of the funds available in any '
fiscal year for the Alliance for Progress loans
may be used for any purpose other than for
specific developmental projects, which is to
say, they can not be used for general coun-
try program loans.
In addition to injecting a general require-
ment of extreme inflexibility into the aid
program, the amendment would be detri-
mental to the encouragement of self-help
programs and internal reform. A project
loan inVolves the donor only in a specific
enterprise without permitting him to exert
leverage for related projects, however vital
they may be to the success of the enterprise
for which the loan has been made. It is
far easier to exect leverage for tax or land
reform, for example, if aid is being provided
for a unified program consisting of a num-
ber of specific projects than if the aid is
being provided only for one project.
The purpose of our aid program is far more
to encourage economic development by re-
cipient countries themselves than to achieve
it for them. Project assistance tends far
more toward the latter.
However useful the project may be, it is
unlikely to serve the legitimate interests of
both the recipient and the donor unless it
stimulates related projects. Program as-
sistance, on the other hand, seeks to en-
courage unified growth and to encourage
those measures of internal reform and self-
help which will have an economic multiplier
effect.
Mr. FULBRIGHT. Mr. President, I
hope. the Senate will not accept the
amendment.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Oregon. The
yeas and nays have been ordered, and
the Clerk will call the roll.
The legislative clerk called the roll.
Mr. HUMPHREY. I announce that
the Senator from North Dakota [Mr.
Buimicxl , the Senator from Virginia
[Mr. BYRD], the Senator from Tennessee
[Mr. GoRE], the Senator from Washing-
ton [Mr. JAcKsoN] , the Senator from
Louisiana [Mr. LONG], the Senator from
Utah [Mr. Moss], and the Senator from
Ohio [Mr. YOUNG] are absent on official
business.
I also announce that the Senator from
New Mexico [Mr. ANDERSON] and the
Senator from Massachusetts [Mr.
KENNEDY] are absent because of illness.
I further announce that the Senator
from Nevada [Mr. CANNON] , the Senator
from Pennsylvania [Mr. CLARK], the
Senator from Oklahoma [Mr. EDMOND-
SON], and the Senator from New Jersey
[Mr. WILLiAms] are necessarily absent.
I further announce that, if present and
voting, the Senator from Ohio [Mr.
YoursiG] and the Senator from Pennsyl-
vania [Mr. CLARK] would each vote
"nay."
On this vote, the Senator from New
Jersey [Mr. WILLIAMS] is paired with the
Senator from Virginia [Mr. BYRD]. If
present and voting, the Senator from
Virginia would vote "yea" and the Sen-
ator from New Jersey would vote "nay."
On this vote, the Senator from Wash-
ington [Mr. JACKSON] is paired with the
Senator from Louisiana [Mr. LowG]. If
present and voting, the Senator from
Louisiana would vote "yea" and the
Senator from Washington would. vote
"nay."
Mr. KUCHEL. I announce that the
Senator from Kansas [Mr. PEARSON] and
August 10
the Senator from Pennsylvania [Mr.
Scowl are necessarily absent.
The Senator from New York [Mr.
JAviT5] is absent on official business.
The Senator from Kentucky [Mr.
COOPER] and the Senator from Arizona
[Mr. GOLDWATER] are detained on official
business.
On this vote, the Senator from Arizona
[Mr. GOLDWATER] is paired with the Sen-
ator from New York [Mr. JAviis]. If
present and voting, the Senator from
Arizona would vote "yea," and the Sen-
ator from New York would vote "nay."
On this vote, the Senator from Kansas
[Mr. PEARSON] is paired with the Senator
from Pennsylvania [Mr. SCOTT]. If pres-
ent and voting, the Senator from Kansas
would vote "yea," and the Senator from
Pennsylvania would vote "nay."
If present and voting, the Senator from
Kentucky would vote "nay."
The result was announced?yeas 40,
nays 42, as follows:
' [No. 526 Leg.]
YEAS-40
Aiken
Allott
Bayh
Beall
Bennett
Bible
Boggs
Carlson
Cotton
Curtis
Dominick
Douglas
Eastland
Ellender
Bartlett
Brewster
Byrd, W. Va.
Case
Church
Dirksen
Dodd
Fong
Fulbright
Hart
Hartke
Hayden
Hickenlooper
Hill
Ervin
Gruening
Holland
Hruska
Johnston
Jordan, N.C.
Jordan, Idaho
Lausche
McClellan
Mechem
Morse
Mundt
Nelson
Prouty
NAYS-42
Humphrey
Inouye
Keating
Kuchel
Long, Mo.
Magnuson
Mansfield
McCarthy
McGee
McGovern
McIntyre
McNamara
Metcalf
Miller
Proxmire
Randolph
Robertson
Russell
Simpson
Talmadge
Thurmond
Tower
Walters
Williams, Del.
Yarborough
Young, N. Dak.
Monroney
Morton
Muskie
Neuberger
Pastore
Pell
Ribicoff
Salinger
Saltonstall
Smathers
Smith
Sparkman
Stennis
Symington
NOT VOTING-18
Anderson Edmondson Long, La.
Burdick Goldwater Moss
Byrd, Va. Gore Pearson
Cannon Jackson Scott
Clark Javits Williams, N.J.
Cooper Kennedy Young, Ohio
So Mr. MORSE'S amendment was re-
jected.
Mr. FULBRIGHT. Mr. President, I
move that the vote by which the_amend-
ment was rejected be reconsidered.
Mr. HUMPHREY. Mr. President, I
move that the motion to reconsider be
laid on the table.
The PRESIDING OFFICER. The
question is on agreeing to the motion
of the Senator from Minnesota to lay on
the table the motion of the Senator from
Arkansas to reconsider the vote by which
the amendment was rejected.
Mr. MORSE. Mr. President, on this
question, I ask for the yeas and nays. _
The yeas and nays were ordered.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk called the roll.
Mr. HUMPHREY. I announce that
the Senator from North Dakota [Mr.
BURDICK], the Senator from Tennessee
[Mr. GORE], the Senator from Washing
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
IAN
1964 CONGRESSIONAL RECORD ? SENATE
ton [Mr. JAcxsoN] , the Senator from
Louisiana [Mr. LONG] , the Senator from
Utah [Mr. Moss], and the Senator from
Ohio [Mr. YouNc] are absent on official
business.
I also announce that the Senator from
New Mexico [Mr. ANDERSON] and the
Senator Massachusetts [Mr. KENNEDY]
are absent because of illness.
I further announce that the Senator
from Nevada [Mr. CANNON] , the Senator
from Pennsylvania [Mr. CLARK] , the
Senator from Oklahoma [Mr. EDMOND-
SON] , and the Senator from New Jersey
[Mr. WILLIAMS] are necessary absent.
I further announce that, if present
and voting, the Senator from Ohio [Mr.
YOUNG], the Senator from New Jersey
[Mr. WILLIAMS], and the Senator from
Pennsylvania [Mr. CLARK] would each
vote "yea."
On this vote, the Senator from Wash-
ington [Mr. JACKSON] is paired with the
Senator from Louisiana [Mr. LONG]. If
present and voting, the Senator from
Washington would vote "yea," and the
Senator from Louisiana would vote
"nay."
Mr. KUCHEL. I announce that the
Senator from Kansas [Mr. PEARSON] and
the Senator from Pennsylvania [Mr.
SCOTT] are necesarily absent.
The Senator from New York [Mr.
JAvas] is absent on official business.
The Senator from Kentucky [Mr.
COOPER] and the Senator from Arizona
[Mr. GOLDWATER] are detained on official
business.
If present and voting, the Senator from
Kentucky [Mr. COOPER] would vote
"yea."
On this vote, the Senator from New
York [Mr. JAvirs] is paired with the Sen-
ator from Arizona [Mr. GOLDWATER]. If
present and voting, the Senator from
New York would vote "yea," and the Sen-
ator from Arizona would vote "nay."
On this vote, the Senator from Penn-
sylvania [Mr. SCOTT] is paired with the
Senator from Kansas [Mr. PEARSON] . If
present and voting, the Senator from
Pennsylvania would vote "yea," and the
Senator from Kansas would vote "nay."
The result was announced?yeas 42,
nays 41, as follows:
[No. 527 Leg.]
YEAS-42
Bartlett
Bayh
Brewster
Byrd, W. Va.
Case
Church
Dirksen
Dodd
Fong
Fulbright
Hart
Hartke
Hayden
Hickenlooper
Aiken
Allott
Beall
Bennett
Bible
Boggs
Byrd, Va.
Carlson
Cotton
Curtis
Dominick
Douglas
Eastland
Ellender
Hill
Humphrey
Inouye
Keating
Kuchel
Long, Mo.
Magnuson
Mansfield
McCarthy
McGee
McGovern
McIntyre
McNamara
Metcalf
NAYS-41
Ervin
Gruening
Holland
Hruska
Johnston
Jordan, N.C.
Jordan, Idaho
Lausche
McClellan
Mechem
Morse
Mundt
Neuberger
Prouty
Miller
Monroney
Morton
Muskie
Nelson
:nastore
Pell
Ribicoff
Salinger
Saltonstall
Smathers
Smith
Sparkman
Symington
Proxmire
Randolph
Robertson
Russell
Simpson
Stennis
Talmadge
Thurmond
Tower
Walters
Williams, Del.
Yarborough
Young, N. Dak.
NOT VOTING-17
Anderson Goldwater
Burdick Gore
Cannon Jackson
Clark Javits
Cooper Kennedy
Edmondson Long, La.
Moss
Pearson
Scott
Williams, N.J.
Young, Ohio
So the motion to lay on the table was
agreed to.
Mr. HART. Mr. President, I call up
my amendment No. 1190.
The PRESIDING OFFICER. The
amendment of the Senator from Michi-
gan will be stated.
The Chief Clerk proceed to read the
?
amendment.
Mr. HART. Mr. President, I ask
unanimous consent that the reading of
the amendment be waived.
The PRESIDING OFFICER. Without
objection, it is so ordered.
The amendment will be printed in the
RECORD.
The amendment is as follows:
On page 16, between lines 1'7 and 18, insert
the following:
"CHAPTER 3?MISCELLANEOUS PROVISIONS
"SEC. 303. Chapter 3 of part III of the For-
eign Assistance Act of 1961, as amended,
which relates to miscellaneous provisions, is
amended by adding at the end thereof the
following new section:
"'SEC. 648. SPECIAL AUTHORIZATION FOR USE
OF FOREIGN CURRENCIES.?Subject to the pro-
visions of section 1415 of the Supplemental
Appropriation Act, 1953, the President is au-
thorized, as a demonstration of good will on
the part of the people of the United States
for the Polish and Italian people, to use for-
eign currencies accruing to the United States
Government under this or any other Act, for
assistance on such terms and conditions as
he may specify, in the repair, rehabilitation,
improvement, and maintenance of cemeteries
in Italy serving as the burial place of mem-
bers of the armed forces of Poland who died
in combat in Italy during World War II.' "
Mr. HART. Mr. President, before
proceeding, I ask unanimous consent
that the names of the distinguished Sen-
ator from Nebraska [Mr. HausicA] and
the distinguished Senator from Minne-
sota [Mr. McCArmnr] be added as co-
sponsors of the amendment.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. HART. Mr. President, the
amendment would authorize the Presi-
dent to use foreign currencies accruing
to this Government to rehabilitate and
to maintain the cemeteries in Italy which
contain the graves of Poles who fell in
the allied offensive at Monte Cassino in
1944.
The language which I suggest by the
amendment we should add to the bill was
contained in the bill as it came to us
from the other body.
I am advised that the Director of AID
would not object to the amendment. I
do not state, and it would be improper
to state, that he supports the amend-
ment.
The facts, briefly, are as follows: Be-
tween 4,000 and 4,100 Poles fought and
fell in the 2d Polish Army. These
men very largely had escaped through
the Mediterranean basin to the west
after the Germans moved into Russia.
History records many dramatic engage-
ments in World War II, but I submit
that history will always underscore the
action in front of Monte Cassino at the
18225
Rapido River as one of the very key
days in the allied offensive. Those men
were fighting with us and for the cause
which we held dear. The Polish Gov-
ernment in Warsaw today is completely
indifferent to the graves of these men.
The Polish Government in exile in Lon-
don in those days no longer exists.
It would seem to those of us who offer
the amendment that we could very dra-
matically portray to the people of Po-
land our continuing concern and re-
spect for Polish men who fell in defense
of freedom's cause.
I very much hope that the Senate will
return to the bill the language that came
to us from the House. That would be
the effect of the amendment.
For those who are interested in a brief
sketch of the history of the cemeteries,
I suggest that they reread an article
which was contained in the CONGRES-
SIONAL RECORD of August 5, 1964, at page
17484. It is a description by a GI who
returned to the great battle scene, and
it is a heartbreaking story of the dis-
repair of the cemetery in Italy which
contains the places of honored rest of
brave men, the maintenance of which
places America very prudently could au-
thorize the President to undertake.
Mr. HRUSKA. Mr. President, will the
Senator from Michigan yield?
Mr. HART. I yield.
Mr. HRUSKA. I thank the distin-
guished Senator from Michigan for ex-
tending to me the privilege of being a
cosponsor of his amendment. I subsdribe
to the thoughts which he has expressed
and the reasons that he thinks the
amendment should be adopted. The
world thrilled to the very bitter and
strategic battle which occurred in Monte
Cassino, approximately 20 years ago.
But it was tragic in many of its aspects.
There has been the task of rebuilding
the village. There has been a job of
rehabilitating and, in fact, reconstruc-
ting the abbey itself. But the cemetery
which is the last resting place of 4,085
members of the Polish contigency that
fought on the side of the allies on that
occasion lies quite abandoned and neg-
lected A memorial has been constructed
at the site, but it is in a sad state of
disrepair. It does not reflect any great
credit upon the feeling of appreciation
for the sacrificial acts that were per-
formed there.
Obviously the present Government of
Poland will have no part of it and will
do nothing in the circumstances. There
is no longer a Polish Government in exile
in London; and if anything is to be done,
it will have to be done by a method some-
thing like that which has been proposed
by the Senator from Michigan in the
amendment, and which the Senator from
Nebraska supports. As I understand, the
amendment would merely authorize the
appropriation of funds. It would employ
the use of counterpart funds wherever
they are available and any such unex-
pended balance that there may be for
this purpose. I urge Senators to adopt
the amendment.
Mr. HART. Mr. President, I appre-
ciate the support of the Senator from
Nebraska.
Mr. COOPER. Mr. President, will the
Senator yield?
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18226 CONGRESSIONAL RECORD ? SENATE
Mr. HART. I yield.
Mr. COOPER. I did not hear the ex-
planation of the Senator from Mich-
igan. Will he repeat his explanation?
Mr. HART. Very briefly, the amend-
ment would authorize the President,
when counterpart funds are available?
and it would require a specific further
appropriation action?to rehabilitate
and thereafter maintain the cemetery in
Italy in which ?are buried about 4,000
Polish soldiers who fought with the 2d
Polish Army at Monte Cassino. Today,
tragically, the cemetery is in terrible dis-
repair. It affronts anyone sensitive to
the values that persuaded those men to
make that sacrifice.
We in America could here make a
significant gesture to the people of Po-
land and elsewhere in Eastern Europe,
demonstrating our continuing realiza-
tion that the aspirations which were
theirs then and which we shared then
continue to be shared. We think this is
a tangible method to demonstrate that
concern.
Mr. COOPER. I thought the Senator
might have also been referring to the
cemetery at Arnhiem, where lie a num-
ber of Polish paratroopers who also gave
their lives in their devotion to the allied
cause.
Mr. HART. Mr. President, I yield to
the Senator from Maine [Mr. Musxml,
but first I ask unanimous consent that
his name be added as a cosponsor.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Mr. MUSKIE. Mr. President, I
thought it might be appropriate at this
point to give the Senate some descrip-
tion of the Polish graves in Italy as con-
tained in Mr. Deutschman's article. I
quote as follows:
A few hundreds yards below the abbey is a
small sign saying: Polish Cemetery." The
Free Poles were the ones who finally stormed
and captured the remains of the abbey, and
you walk for about a half mile past a
jangly-belled donkey, two cows feeding in the
bushes, and two gypsylike peasant women
who hardly glance at you, to what is un-
doubtedly the most heartbreaking sight of
your trip.
A graveled path leads up to a simple stone
pillar with a cross on top. A growth of
mimosa trees forms an impressive cross of
greenery beside an altar, flanked by two
Polish eagles, with 10 coats of arms on its
front. Below is a plot of perhaps 500 graves.
But there is no caretaker here, and the
altar has sightseers' names scratched on it
(happily, no American ones). The graves
are literally falling away into the earth. The
crosses and flat stones are of inferior marble,
and some in half; others have been eaten
away by the weather so that you can barely
make out the names engraved on them. Most
of the men, you notice, died on May 12, 1944.
Two of the crosses have faded bits of colored
ribbon hanging from them, undoubtedly sig-
nifying medals. The gate has a pair of brave
stone eagles on either flank, but they are
corroded with holes. Underneath, there is a
flame?like the Eternal Flame at Arlington
or under the Arch of Triumph in Paris?but
It is unlit, and there are three weatherworn
wreaths alongside. You cannot help but
contrast this Polish memorial with all others
you have seen?and realize that there is in-
equality even in death.
I should like to point out, as the Sena-
tor from Michigan has so well pointed
out, that these are graves of - men who
fought for freedom in World War II, the
men we cheered from the sidelines in
America, for long months and years.
They did not achieve their goal, but they
died for it, and it seems to me we owe
an obligation to honor them at the place
where they fought and where they lie
dead on Italian soil.
Mr. HART. I echo the eloquent plea.
made by the Senator from Maine.
Mr. President, I also ask unanimous
consent to add as an additional cospon-
sor the name of the Senator from Wis-
consin [Mr. PROXMIRE].
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. HART. Mr. President, I am also
delighted to ask unanimous consent that
the Senator presiding in the chair at
the moment, the Senator from Hawaii
[Mr. INOUYE], may be added as a co-
sponsor.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. PELL. Mr. President, will the
Senator yield?
Mr. HART. I yield to the Senator
from Rhode Island.
Mr. PELL. It is my recollection that
the Poles who were fighting at Monte
Casino were under British command.
Have the British, under whose command
the Poles were fighting, been contacted
with respect to the responsibility of look-
ing after the graves?
Mr. MUSKIE. It is true, as the Sena-
tor has said, that the British Army was
In command and that the Poles took
their general field direction from them.
As to the specific question addressed
to me, I must confess I have no knowl-
edge of it. I do not know whether the
British Government would care to co-
operate in the undertaking or not. I
would feel that we clearly could reha-
bilitate these graves, and not condition
our action upon the participation by any
other people, although it would be surely
welcome if the British Government ex-
pressed a similar desire.
Mr. PELL. Mr. President, will the
Senator yield further?
Mr. MUSKIE. I yield.
Mr. PELL. Does the Senator have
knowledge of any other graves honoring
allies or co-belligerents of ours that we
currently take care of now?
Mr. MUSKIE.' I do not know whether
there is a comparable cemetery or not.
Mr. PELL. Otherwise, would it not be
establishing a precedent as to future
wars and in connection with past wars?
Mr. MUSKIE. If this is indeed a pre-
cedent, I think the compelling reasons
for doing this as a first step are sufficient
unto themselves and would indeed per-
suade us to act similarly in the future?
pray God we shall not have another
war?for those who ,fought and died for
us and who were dishonored in that place
of rest. I would pray that in the future
there will be no similar need. We all
hope there will be no such necessity. In-
deed, we are told, if there is a war on a
massive scale there will not be enough
people left to dig graves for the dead.
Mr. PELL. I think it will be found
that in the Far East and Eastern Europe
August 10
there are many graves of those who
fought for our cause or our side of the
war which are in bad condition indeed.
Mr. MUSKIE. If that is the case, I
would suggest that our own Battle Monu-
ments Commission inventory and report
on them. I for one would feel very un-
comfortable if this situation were found
to exist, and would indeed urge that it be
corrected.
Mr. BEALL. Mr. President, will the
Senator yield?
Mr. MUSKIE. I yield.
Mr. BEALL. Is it the Senator's in-
tention to ask for the yeas and nays on
this amendment?
Mr. MUSKIE. No; we are content to
accept the sound judgment of Senators
present on the floor.
Mr. BEALL. Mr. President, I wonder
if the Senator would allow me to become
a cosponsor?
Mr. MUSKIE. I would be delighted.
Mr. BEALL. I ask to join the amend-
ment as a cosponsor, and I also ask that
same permission in behalf of the Senator
from Pennsylvania [Mr. SCOTT].
Mr. HART. Mr. President, I ask unan-
imous consent that the names of the
Senator from Maryland [Mr. BEALL] and
Pennsylvania [Mr. ScoTTl be added as
cosponsors.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. LATJSCHE. Mr. President, I de-
sire to offer my support of the amend-
ment offred by the Senator from Michi-
gan, and I ask unanimous consent to
have my name added as a cosponsor.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. LAUSCHE. Mr. President, I can-
not help recalling that when Poland fell
200,000 Poles left Poland as the re-
manents of the government of that na-
tion. Most of them went to England
and there awaited assignment to the
various battlefields of the world. As the
war continued we found the Poles fight-
ing not only in Africa, Italy, and France,
but everywhere where the cause of free-
dom was being defended. The Poles were
friends of the West. They were not
Communists. They, in a measure, sub-
sequently became the victims of the per-
fidy of Red Russia when, through the air
waves, Red Russia called upon the Poles
to revolt under Nazi domination in the
belief that Red Russia would come to
its aid.
Today, Poland is ruled by Communists.
The friends of the West are not loved by
the Communist government. The Polish
people, however, are on our side. I ven-
ture to say that in behalf of the 4,000
Poles who lie asleep at the cemetery near
Monte Cassino the bells of Poland do
not toll in memory. Prayer in public
cannot be said in their behalf. , Wreaths
of flowers cannot be placed upon the
graves of those patriots by the Polish
people. Prayers and the ritual of mass
cannot be said in their memory in Poland.
If there is to be an honoring of these
patriots of the West, it will not come
through the words of the Communist
government. It may come some day
when freedom is restored in Poland.
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
1964 CONGRESSIONAL RECORD ? SENATE
While we await that day, knowing what
these volunteers of Poland did, it is only
proper that our government honor these
graves. Those heroes did not run. They
stood fast, ready to be assigned wherever
the West would send them. The conse-
quence is that the lives of the Poles were
given in? practically every important
battle in which we were engaged. It is
nothing more than a tender token of the
sympathy of the American people to
honor those graves and to let the Polish
people know that while the Communist
government of Poland will not do the
job, we of the United States will.
I commend the Senator from Michi-
gan.
Mr. HART. I appreciate what the
Senator has said. I hope the Senate will
adopt the amendment.
Mr. FULBRIGHT. Mr. President, the
provision was contained in the House
version. The Senate committee struck
It out, because in our opinion, there was
no testimony to justify such a provision.
These Poles were not members of the
United States Armed Forces. They were
primarily members of the British forces.
They Were not American soldiers; in other
words.
, I also point out that no excess lire
are available. It would be necessary to
appropriate the money from the Treas-
ury to implement this provision. As
much sympathy as I have for the Poles,
soldiers of many nationalities fought in
our armies, in the British Army, and in
other foreign armies of the West in vari-
ous wars, for whom we could do the
same thing that is suggested we do for
the Poles.
This would be an unprecedented ac-
tion. I can think of no case in which
we have made an appropriation of Fed-
eral funds to care for cemeteries of na-
tionals of other countries who have been
engaged in battles in which we had an
interest.
I presume we could find, if we looked
over the world, many instances in which
nationals of other countries have fallen
in battles in which we were interested;
but in no case, to my knowledge, would
we find our Government undertaking
either to build or care for or maintain
cemeteries for nationals of other coun-
tries. -
Finally, the question will be in con-
ference with the House, and it could be
more amply discussed and perhaps re-
solved at that time. For the moment,
the committee voted to eliminate the
provision. I hope the Senate will support
the committee in this respect.
Mr. KEATING. Mr. President, I wish
to express my commendation for our
colleague from Michigan [Mr. HART] for
raising this important issue, and to tell
him that I support the amendment com-
pletely. With his permission, I should
be delighted to be a cosponsor of the
amendment.
Mr. HART. I ask unanimous consent
that the Senator's name may be added'
to -the amendment as a cosponsor.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. KEATING. While I realize that
the matter will be in conference even if
No. 155-9
we do not take action here, my exper-
ience with this kind of proposal for con-
ference committee consideration has not
been a happy one. I remember several
instances when amendments were ac-
cepted and taken to conference, and
that was the last we ever heard of them.
Without in any way challenging the
good faith of the distinguished chair-
man of the Foreign Relations Commit-
tee, or his statement that the question
would be considered in conference, as I
understand, all that is involved is the
use of foreign currencies that accrue to
our Government. While the currencies
may not be available in Italy, they are
available in a number of other countries
and possibly could be transferred.
Mr. - FULBRIGHT. Mr. President,
will the Senator yield?
Mr. KEATING. I yield.
Mr. FULBRIGHT. That is not rele-
vant. It is not possible to use rupees in
Italy for example.
Mr. KEATING. But it is possible to
use rupees if the authorization to use
rupees is there.
Mr. FULBRIGHT. In Italy?
Mr. KEATING. Members of Con-
gress traveling abroad are given coun-
terpart funds. Through an arrange-
ment with the State Department, the
Department makes available counter-
part funds for use by Members of Con-
gress in countries that do not have
counterpart funds. I believe that the
Polish soldiers who fought side by side
with us are just as worthy of considera-
tion in the use of these counterpart
funds as is any Member of Congress.
Mr. FULBRIGHT. I do not argue
against the Senator's feeling in the
matter. He may be right. However,
the so-called counterpart funds are not
counterpart in the sense that they were
originally intended to be. When the
Senator goes to Italy and is given lire
that is exactly the same as giving him
dollars. It costs the same amount.
The Government has to buy lire. It is
not possible to use rupees.
Mr. KEATING. The amendment
would only authorize the use of foreign
currencies for assistance in Italy.
Mr. FULBRIGHT. But it must be
lire.
Mr. KEATING. Of course, it must be
lires that are spent. My point is that
if it is a worthy purpose, it should be
done. It may be that lire will develop in
the future before we need to use this
fund, through sales of surplus foods, for
instance. I recognize they are not there
today. In the case of traveling Members
of Congress, an arrangement is ,made
whereby the currency of a country which
has no counterpart funds is made avail-
able to a traveling Member of Congress
through an arrangement made with
some country which has counterpart
funds. This is as worthy a case as that
of any Member of Congress traveling in
Europe.
Mr. FULBRIGHT. Mr. President, will
the Senator yield?
Mr. KEATING. I yield.
Mr. FULBRIGHT. The administra-
tion does not do what the Senator says
it does out of the goodness of its heart.
18227
Congress requires it to do so. If the
Senator wishes to sponsor an amend-
ment to the effect that no Member of
Congress may have the use of these coun-
terpart funds, I might support him. The
administration does it because Congress
says it must do it, because Congress re-
quires the administration to do it.
Mr. KEATING. I recognize that it is
authorized to be done, just as this action
would be authorized to be done, if the
amendment were adopted. My point is
that this is as worthy a cause as that of
a traveling Member of Congress.
Mr. FULBRIGHT. That might be.
Mr. KEATING. The amendment is in
line with a legislative, prop6sal which I
have made, for veterans benefits to be
paid to veterans of the Free Polish Army
and other armies which fought side by
side with us during World War II for the
same objective. They, too, deserve vet-
erans benefits to help them and their
families pay for medical bills or other
expenses which derive directly or in-
directly from their years of fighting for
the cause of freedom.
The amount involved is not large. It
would serve as a tribute to the heroes of
Polish ancestry who died, as our boys
died, in Italy during World War II. The
relatives of many of them now live in
this country.
The very least we can do is to provide
a suitable burial place for members of
the Polish Army who died in the battles
of Monte Cassino and the Allied landings
In Italy. If our own soldiers were here
to speak today, they would welcome this
meritorious amendment.
Again, I commend the distinguished
Senator from Michigan for bringing it to
our attention. I believe it should have
overwhelming support.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Michigan [Mr.
HART].
Mr. MANSFIELD. Mr. President, on
this amendment, I ask for the yeas and
nays.
The yeas and nays were ordered.
The PRESIDING OFFICER. The
clerk will call the roll.
The Chief Clerk called the roll.
Mr. HUMPHREY. I announce that
the Senator from North Dakota [Mr.
BURDICK], the Senator from Tennessee
[Mr. GORE], the Senator from Washing-
ton [Mr. JACKSON], the Senator from
Louisiana [Mr. LONG], the Senator from
Utah [Mr. Moss], the Senator from Ohio
[Mr. YOUNG], the Senator from Virginia
[Mr. BYRD], and the Senator from Vir-
ginia [Mr. ROBERTSON] are absent on
official business.
I also announce that the Senator from
New Mexico [Mr. ANDERSON] and the
Senator from Massachusetts [Mr. KEN-
NEDY] are absent because of illness.
? I further announce that the Senator
from Nevada [Mr. CANNON], the Senator
from Oklahoma [Mr. EDMONDSON], the
Senator from Pennsylvania [Mr. CLARK],
and the Senator from New Jersey [Mr.
WILLIAms] are necessarily absent.
I further announce that, is present and
voting, the Senator from New Jersey [Mr.
WILLIAMS], the Senator from Ohio [Mr.
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9
18228 CONGRESSIONAL RECORD ? SENATE
YouNcl , and the Senator from Pennsyl-
vania [Mr. CLARK] would each vote
"yea."
On this vote, the Senator from Wash-
ington" [Mr. JAcKsoN] is paired with the
the Senator from Louisiana [Mr. LONG].
If present and voting, the Senator
from Louisiana would vote "nay" and
the Senator from Washington would vote
"yea."
Mr. CARLSON. I announce that the
Senator from Kansas [Mr. PEARSON] and
the Senator from Pennsylvania [Mr.
SCOTT] are necessarily absent. 4
The Senator from New York [Mr.
JAvITsl is absent on official business.
The Senator from Arizona [Mr. GOLD-
WATER] is detained on official business.
If present and voting, the Senator
from Arizona [Mr. GOLDWATER], the Sen-
ator from New York [Mr. JAviTs], the
Senator from Kansas [Mr. PEARsoN], and
the Senator from Pennsylvania [Mr.
Scon] would each vote "yea."
The Senator from Illinois [Mr. DIRK-
sEN], the Senator from Iowa [Mr.
HicxEmoopEre], the Senator from Cali-
fornia [Mr. KITCHEL], and the Senator
from Massachusetts [Mr. SALTONSTALL]
are detained on official business at the
White House.
The result was announced?yeas 60,
nays 18, as follows:
[No. 528 Leg.]
YEAS-60
Allott Gruening Morton
Bartlett Hart Mundt
Bayh Hartke Muskie
Beall Holland Nelson
Bennett Hruska Neuberger
Bible Humphrey Pastore
Boggs Inouye Prouty
Brewster Jordan, Idaho Proxmire
Byrd, W. Va. Keating Randolph
Carlson Lausche Ribicoff
Case Long, Mo. Salinger
Church McCarthy Stennis
Cooper McGee Symington
Cotton McGovern Talmadge
Curtis McIntyre Thurmond
Dodd McNamara Tower
Dominick Mechem Walters
Douglas Metcalf Williams, Del.
Eastland Miller Yarborough
Fong Monroney Young, N. Dak.
Aiken
Eliender -
Ervin
Fulbright
Hayden
Hill
NAYS-18
Johnston
Jordan, N.C.
Magnuson
Mansfield
McClellan
Morse
Pell
Russell
Simpson
Smathers
Smith
Sparkman
NOT VOTING-22
Anderson Gore Pearson
Burdick Hickenlooper Robertson
Byrd, Va. Jackson Saltonstall
Cannon, Javits
Clark Kennedy
Dirksen Kuchel
Edmondson Long La.
Goldwater Moss
So Mr. HART'S amendment was agreed
to.
Mr. HART. Mr. President, I move
that the vote by which the amendment
was agreed to be reconsidered.
Mr. KEATING. Mr. President, I move
that the motion to reconsider be laid on
the table.
The motion to lay on the table was
agreed to.
Mr. MORSE. Mr. President, I wish to
make a statement in explanation of my
"vote against the Hart amendment,
Scott
Williams, N.J. MESSAGE FROM THE HOUSE
Young, Ohio
A message from the House of Repre-
which amendment was just adopted by
the Senate. I was called from the
Chamber when the chairman of the
Foreign Relations Committee [Mr. FuL-
BRIGHT] made his statement in regard to
this particular amendment.
I had planned to vote for the amend-
ment. I believe that we should do what
we can to provide appropriate care for
the graves of Polish veterans of World
War II in Italy.
Inasmuch as I was absent from the
Chamber, and did not get back until the
vote had started, I therefore could not
ask any questions.
I was advised that the chairman of the
Foreign Relations Committee had said
that there are no excess funds in Italy.
I hold his statement in my hand, in
which he states, in part:
First, no testimony was presented during
the hearing phase which would have clarified
the arguments for this proposal and its
further implications; second, the foreign
currencies referred to obviously would be
Italian lire, which are not in "excess" supply.
In connection with the second point, a suc-
cessful effort to implement this authority
could take place only if dollars were ap-
propriated with which to buy lire.
While the vote was being taken, I asked
certain questions of my colleagues on
the Committee on Foreign Relations.
They said there are not any excess Ital-
ian funds, that we do not have a storage
supply of Italian so-called counterpart
funds, as we have with so many other
countries of the world. Therefore I de-
cided that I could not vote for what I
considered to be an empty gesture.
It is my own personal opinion that my
constituents are entitled to know my
reasons for the vote. I could not vote
for an amendment, although I am for
the purpose of the amendment, when at
the time of the vote I was voting funds
which were nonexistent.
I believe that raises false hopes. If
they state in the bill that they wish to
make an appropriation to pay for per-
petual care for Polish graves in a ceme-
tery in Italy, I believe I would support
that bill.
I voted against this because in my
judgment I thought it was asking me
to vote for something when, in fact, the
funds that are supposed to be used to
accomplish the purpose are nonexistent.
The Senator from Oregon does not hold
for that kind of legislation.
sentatives, by Mr. Hackney, one of its
reading clerks, communicated to the
Senate the intelligence of the death of
Hon. JOHN B. BENNETT, late a Represent-
ative from the State of Michigan, and
transmitted the resolutions of the House
thereon.
DEATH OF JOHN B. BENNETT, A REP-
RESENTATIVE FROM THE STATE
OF MICHIGAN
Mr. HART. ? Mr. President, we have
just been advised of the death of the
senior member of the Michigan delega-
August 10
tion, Representative JOHN B. BENNETT.
I am sure that there will be time for
those of us who knew him well to express
more fully and adequately our deep re-
gret at his passing.
While I am in the Chamber, I assure
the family of Representative BENNETT
of the great sense of loss that each Sen-
ator feels. Whatever political differences
there may have been, in everything that
Representative BENNETT did, he always
sought to do that which would advance
the best interests of his country.
? The PRESIDING OFFICER. The
Chair lays before the Senate a resolution
from the House of Representatives,
which the clerk will read.
The Chief Clerk read as follows:
Resolved, That the House has heard with
profound sorrow of the death of the Honor-
able JOHN B. BENNETT, a Representative from
the State of Michigan.
Resolved, That a committee of fifty-four
Members of the House, with such Members of
the Senate as may be joined, be appointed to
attend the funeral.
Resolved, That the Sergeant at Arms of the
House be authorized and directed to take
such steps as may be necessary for carrying
out the provisions of these resolutions and
that the necessary expenses in connection
therewith be paid out of the contingent fund
of the House.
Resolved, That the Clerk communicate
these resolutions to the Senate and transmit
a copy thereof to the family of the deceased.
-Resolved, That as a further mark of re-
spect, the House do now adjourn.
Mr. HART. Mr. President, I send to
the desk a resolution and ask that it be
stated.
The PRESIDING OFFICER. The
clerk will state the resolution submitted
by the Senator from Michigan.
The Chief Clerk read the resolution
(S. Res. 349) submitted for himself and
-Mr. MCNAMARA, as follows:
Resolved, That the Senate has heard with
profound sorrow the announcement of the
death of Hon. JOHN B. BENNETT, late a Repre-
sentative from the State of Michigan.
Resolved, That a committee of two Sena-
tors be appointed by the Presiding Officer to
join the committee appointed on the part
of the House of Representatives to attend the
funeral of the deceased Representative.
Resolved, That the Secretary communi-
cate these resolutions to the House of Rep-
resentatives and transmit an enrolled copy
thereof to the family of the deceased.
The resolution was considered by
unanimous consent, and unanimously
agreed to.
The PRESIDING OFFICER. The
Chair appoints the two Senators from
Michigan [Mr. MCNAIVIARA and Mr. HART]
to accompany the committee from the
House to attend the funeral of the late
Representative BENNETT.
AMENDMENT OF FOREIGN ASSIST-
ANCE ACT OF 1961
The Senate resumed the considera-
tion of the bill (H.R. 11380) to amend
further the Foreign Assistance Act of
1961, as amended, and for other pur-
poses.
Mr. PROXMIRE. Mr. President, I call
up my. amendment No. 120'1 and ask
unanimous consent that the amendment
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090002-9