AMENDMENT OF FOREIGN ASSISTANCE ACT OF 1961

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000300090005-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 23, 2016
• Document Release Date: February 21, 2014
• Sequence Number: 5
• Publication Date: August 11, 1964
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090005-6
18456
CONGRESSIONAL RECORD SENATE
AMENDMENT OF ?OREIGN ASSIST-
ANCE ACT OF 1961 .
The Senate resumed the consideration
of the bill (H.R. 11380) to amend further
the Foreign Assistance Act of 1961, as
'amended, and for other purposes.
Mr. MUNDT. Mr. President, I call up
my amendment 1177 and ask that it be
stated.
The PRESIDING Ole.LoiCER (Mr. Mc-
GOVERN in the chair). The amendment
of the Senator from South Dakota will
be stated. ?
The legislative clerk read as follows:
On page 1, between lines 6 and 7, insert the
following:
"TITLE I?DEVELOPMENT LOAN FUND
"SEC. 101. Section 201(d) of the Foreign
Assistance Act of 1961, as amended, which
relates to the Development Loan Fund, is
amended to read as follows:
"'(d) Funds made available for this title
shall not be loaned or reloaned at rates of
interest excessive or unreasonable for the
borrower and in no event shall such funds
(eXcept funds loaned under section 205 and
funds which prior to the date of enactment
of the Foreign Assistance Act of 1964 were
authorized or committed to be loaned upon
terms which do not meet the minimum rates
set forth herein) be loaned (1) in the case
of commercial loans, at a rate of interest
of less than the rate arrived at by adding
one-quarter of 1 per centum per annum to
the rate which the Secretary of the Treasury
determines to be equal to the average an- ,
nual interest rate on all interest-bearing ob-
ligations of the United States then forming
a part of the public debt as computed at the
end of the fiscal year next preceding the date
:the application for the loan is approved and
? by adjusting the ' result so obtained to the
nearest one-eighth-of 1 per centum, and (2)
in the case of noncommercial loans, at a
rate of not less than 21/2 per centum per an-
num. With respect to commercial loans,
payments constituting principal on any such
loan may be postponed during the period
?from the date on which the funds are ini-
tially made available under the loan to the
date on -which the productive enterprise or
facility which is the subject of such loan
commences operations or is available for op-
erational use, and thereafter such payments
of principal shall become due at intervals of
not less than one year until repayment in
full is made in 'la more than twenty"-five
years. Noncommercial loans shall be re-
paid in regular installments within not more
than twenty-five years. For the purposes of
this subsection-
-(A) the term "commercial loans" In-
cludes loans made, as determined by, the
President, for the development of productive
enterprises or facilities directly used in the
operation of productive enterprises, such as
equipment, machinery, supplies, or materials,
and for the acquisition of land necessary for
the development of productive enterprises or
facilities? and
?(B) the term "noncommercial loans"
includes all other loans.'"
Redesignate the succeeding sections under
part I accordingly.
Mr. MUNDT. Mr. President, this is
an amendment offered on behalf of my-
self, the Senator from Oregon [Mr.
MORSE], the Senator from Ohio [Mr.
LAIISCHE] and the Senator from Colo-
rado [Mr. DomitlicK].
If I may have the attention-of the Sen-
ators, it will not take long to_discuss the
amendment. ? .
Senators will .recall the vote earlier
today on the so-called Gruening amend-
ment. This is a modification of what
was proposed in that amendment, which
moves in the same direction, but not as
far or as fast. I believe that it is a more
reasonable and acceptable approach
than the Gruening amendment.
The difference primarily 'between the
amendment recommended by the Sen-
ator from Alaska [Mr. ORIJENING] and
voted down by a margin of four votes
and this amendment is twofold.
In the first place, instead of charging
substantially 4 percent interest on all
loans made, this development loan pro-
posal divides development loans into two
types?first, the profit-making loans, the
purely commercial loans; and second,
the nonprofit-making loans or the non-
commercial loans, such as a loan for a
schoolhouse, a highway, or something
which involves a nonrevenue-produc-
ing project.
The first section of amendment No.
1177 provides that for commercial loans
the interest rate shall be the prevailing
cost to the U.S. Government plus one-
quarter of 1 percent carrying charge.
In the commercial revenue-producing
type of development loan, that would be
the amount which would be collected to
establish a reasonable table of amortiza-
tion so that the loan would be repaid
fractionally every year for 25 years once
the commercial installation had been
completed.
In the nonrevenue-producing loan, we
provide an interest rate of 21/2 percent
per annum, which is substantially 2 per-
cent plus a carrying charge.
That is substantially the interest rate
used on REA loans. It is one-half of a
percent less even including the service
charge than we charge veterans when
they make loans; and they, of course,
receive special consideration?to which
they are entitled?by virtue of the fact
that they are veterans.
In my opinion, this could be called a
good faith amendment. It is a good faith
amendment, in the first place, because it
provides good faith on our part, in that
we recognize the difference between a
commercial loan designed to make money
for the borrower and a noncommercial
loan designed to serve the people of some
backward or developing country.
It is a good faith amendment, in the
second place, because it provides for a
manifestation of good faith on the part
of the borrowers. It sets up an amor-
tization-table so that they can start pay-
ing the money back fractionally year by
ye-ar. Thus, they establish the book-
keeping procedures and the fiscal habits
of making the repayment, so that the
government overseas which makes the
loan has to begin the process of repay-
ment; whereas under our present system
of the 10-year period of nonpayment, fre-
quently the governments have changed
and the new person in charge asserts
that he should not be compelled to pay
back a 'loan made by his predecessor.
There are now no bookkeeping habits,
and there are no fiscal habits; and as a
consequence we never collect on the loan.
Let me point out why I believe this is
a salutary reform which is essential in
order for Senators in turn to be operat-
ing in good faith with our constituents.
August 11
If a loan is a loan, it should be repaid.
If a loan is a loan, it should bring some
interest to the one who provides the
money. To me, the only difference pres-
sently between a' loan and a grant is
that the loan pays interest of one-fourth
of 1 percent. The so-called interest
payment statistics show that that is less
than the cost to us of servicing the loan,
so there is no good faith at all. We tell
our home folks that we did not vote for
a giveaway, that we did not vote for a
grant, but voted for a loan; but it is not
a loan if it bears only one-fourth of 1
percent interest and is not repayable be-
fore 40 years.
I should like to read a letter to the
Senate, written by John Funari, Legis-
lative Programs Coordinator for the De-
partment of State in the AID Agency. I
raised the question earlier as to what
happened to commercial borrowing over-
seas, and who gets- the benefit of the
so-called loans at three-fourths of 1 per-
cent. I called attention particularly to
the Premier Automobiles, Ltd., of India,
which has been borrowing this money.
Let me illustrate what happened.
This letter was addressed to Pat Holt,
writing at my request to the AM group
who' make the official answer, and is
dated July 2, 1964:
DEAR PAT: Thank you for your request of
June 25 for a detailed explanation of the
development loan to Premier Automobiles,
Ltd., of India (loan 386-11-059).
This loan was made directly to Premier;
it did not first pass through the Govern-
ment of India.
This was taxpayers' money which we
loaned to an automobile company to
manufacture automobiles at a profit in
India.
Reading on:
However, under a special procedure known
as a two-step loan repayment?
I interpolate to say that this should be
called the foxtrot loan repayment pro-
gram rather than the two-step loan
program, because there is something
rather "foxy" about it.
To continue reading:
the Indian Government will repay the United
States for the loan in dollars, over a 40-year
period, at three-fourths of 1 percent interest,
with 10 years' grace.
Which means it could be a 50-year
loan. I continue:
Premier, in turn, will make principal and
interest payments to the Indian Government,
in rupees, over a 15-year period, at 53/4 per-
cent interest, with 2-years' grace.
In other words, we are placing the
Government of India in a sweet broker-
age position where they take our money,
collect 53/4 percent interest from the Pre-
mier Automobile Co., with a 2-year grace
period, and repay it to us over 40 years,
after a 10-year grace period, at three-
fourths of 1 percent interest.
I cannot think of anything more star-
tling or convincing that this testimony
of the AID officials themselves as to what
happens when we try to disguise a grant
as a loan by requiring only three-fourths
of 1 percent interest.
Continuing with the letter:
By legislative mandate, U.S. development
loans must be repaid in dollars. India's need
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CONGRESSIONAL RECORD ? SENATE 18457
for foreign exchange, particularly U.S. dol-
lars, and its external debt burden over the
next decade, are sufficiently severe that short
grace periods and high interest rates on U.S.
loans would be detrimental to its develop-
ment efforts. The United States, accord-
ingly, extends more liberal terms and rates.
Mr. President, I ask unanimous con-
sent to have the entire letter printed in
the RECORD.
There being no objection, the letter
was ordered to be printed in the RECORD,
as follows:
DEPARTMENT OF STATE, AGENCY
FOR INTERNATIONAL DEVELOP-
MENT,
Washington, D.C., July 2, 1964.
MT. PAT M. HOLT,
Acting Chief of Staff, Committee on Foreign
Relations, U.S. Senate, Washington, D.C.
HEAR PAT: Thank you for your request of
June 25 for a detailed explanation of the
development loan to Premier Automobiles,
Ltd., of India (loan 386?H-059).
This loan was made directly to Premier; it
did not first pass through the Government
of India.
However, under a special procedure known
as a two-step loan repayment, the Indian
Government will repay the United States for
the loan in dollars, over a 40-year period, at
three-quarters of 1 percent interest, with 10
years' grace. Premier, in turn, will make
principal and interest payments to the
Indian Government, in rupees, over a 15-year
period, at 5% percent interest, with 2 years'
grace.
By legislative mandate, U.S. development
loans must be repaid in dollars. India's
need for foreign 'exchange, particularly U.S.
dollars, and its external debt burden over
the next decade, are sufficiently severe that
short grace periods and high interest rates
on U.S. loans would be detrimental to its
development efforts. The United States, ac-
cordingly, extends more liberal/ terms and
rates.
As a private company, engaged in business
for profit, Premier can and should pay cus-
tomary commercial rates for the loan.
"Softer" terms would effectively grant
Premier an unfair competitive advantage.
As its earnings are primarily in rupees,
Premier is obliged to pay the Indian Gov-
ernment in rupees, not dollars.
If I can be of further assistance, please do
not hesitate to contact me.
Sincerely yours,
JOHN PONAR/,
Legislative Programs Coordinator.
Mr. MUNDT. Mr. President, I point
out that they not only collect 5% per-
cent and pay the USA only three-fourths
of 1 percent, but they also take a 2-year
grace period from the automobile com-
pany out of a 10-year grace period, which
thus makes it an 8-year period with in-
terest payments on the part of Premier
Automobiles but the Government of India
waits on 10 full years before starting to
pay our money back to us.
My amendment, therefore, seems to
me to be a modest and logical step in the
direction of keeping good faith, all aimed
at doing to a lesser extent, what the
Gruening amendment would have done
to a larger extent by requiring a 4-per-
cent flat rate.
I am sure that ,some Senators who
voted in the negative on the Gruening
amendment should now be inclined to
vote in the affirmative on my amend-
ment, because it would break the devel-
opments loans up as between a profit-
making loans for the recipient country,
or the recipient firm, and the develop-
ment loans which in turn are noncom-
mercial, nonproductive, nonprofit-mak-
ing loans on which we continue the REA
interest rate plus the one-half of 1 per-
cent carrying charge.
I think the issue is clear. I have no
desire to discuss it at great length. It
seems to me that we shall well serve our
constituents and the cause of AID by
writing in this provision so that hence-
forth we shall have this distinction be-
tween loans and grants. And if there
is an occasion, as there may well be, for
AID appeals, that we should extend a
grant on the part of the American ,tax-
payer to some especially worthy area, so
be it. But let it be labeled as a grant.
Let us do it knowingly and knowledge-
ably with the people back home know-
ing that on that particular occasion a
grant has been called for, a grant is justi-
fied, and a grant is made. But in the
area where we are making loans, it seems
to me this is a salutary step which will
tend to start AID operating on an eco-
nomic and effective basis, enabling it to
deal in turn with recipient countries
on a basis which will make it possible for
us to continue our assistance overseas
without pauperizing the American tax-
payer.
Mr. President, I yield the floor.
Mr. LAUSCHE. Mr. President, with
respect to this amendment, the Senator
from Oregon [Mr. MORSE] and I offered
it in the committee. It was rejected. I,
of course, felt disappointed that it was.
I made my argument on the amend-
ment when the amendment of the Sena-
tor from Alaska [Mr. GRUENING] was be-
ing considered. In that discussion, I
pointed out that Senator MuNDT had re-
ceived a most startling letter. I did not
identify the parties. But the mere narra-
tion of what took place in the transaction
outlined in the letter addressed by AID
to Senator Muisior is indicative of what
is happening. I believe that the pro-
posal offered on behalf of the Senator
from Oregon [Mr. MORSE], the Senator
from South Dakota [Mr. Mumr], and
me, is reasonable.
Commercial loans shall bear the going
rate of interest that our Government is
compelled to pay in borrowing the money,
frequently, to make the loan.t That rate,
according to the present going rate,
would be 3% percent. On noncommer-
cial loans, used to build highways, dock
facilities, sanitation facilities, water-
works, and other public service instal-
lations, the rate shall be not less than
21/2 percent. Even the rate of 21/2 per-
cent will be. substantially below the rate
charged by other developed countries in
the world in making the loans. I point
out to my colleagues that if we are
lending at a very low rate, it is thor-
oughly obvious that every borrower will
be running to our counter to get the
money.
I believe this is a sound amendment.
I think it ought to be passed. It is
reasonable, and my hope is that the
Senate will agree to the amendment.
Mr. FULBRIGHT. Mr. President, the
arguments against the amendment are
very similar to those that have already
been made on the amendment of the
Senator from Alaska. The argument
made by the Senator from South Dakota
[Mr. MUNDT] that this is a mild and
more moderate amendment is erroneous,
I believe. His amendment places a
limit of 25 years on the period of the
loan. But the practice today is to have
a limit of 40 years. The rate of interest
charged on commercial loans is very
definitely an administrative problem, as
we have already explained today at great
length, and determined by vote. The
distinction between program and project
loans has been explained at great length.
One of the activities in the Alliance for
Progress area is program loans, in which
loans are made to the Government to
foster private enterprise, among other
purposes.
The Senator from Oregon and others
have insisted in the committee on the
encouragement of private enterprise.
If we wanted to place an obstacle in the
course of promoting private enterprise,
we could do it by increasing the interest
rate for development loans to the point
where private enterprise in this country
could very well suffer from the terms of
the amendment. This might depend to
some extent on the interpretation of the
amendment.
It is very uncertain as to what the term
"commercial loans" means. I assume
that the sponsor would mean to exclude
from that term such things as dams,
ports, and railroads. Railroads are con-
sidered as infrastructure, just as roads
are. They are sometimes private, as in
this country and in other countries. But
in many cases railroads are not privately
owned. Traditionally, in France, Eng-
land, and many of the underdeveloped
countries, the railroad is not privately
owned. So there is a problem of inter-
pretation. But I should say that this
amendment is more restrictive in many
ways, and on the whole a more difficult
one to live with than the previous one,
which was defeated a short time ago.
Mr. SALTONSTALL. Mr. President,
will the Senator yield?
Mr. FULBRIGHT. I yield.
Mr. SALTONSTALL. The Senator is
making the argument that if the interest
rate which is proposed in amendment No.
1177 is so low that no commercial banks
or professional lenders of money would
?be willing to make the loan at that rate,
therefore we tie up the loans to foreign
countries for commercial purposes. Is
that the argument of the Senator?
Mr. FULBRIGHT. The program
loans that I have mentioned are made in
accordance with the overall plan for the
development of a country. And they are
not earmarked by our Government for
the building of a specific project. They
are really designed to finance the import
of equipment, machinery, and goods
from this country for the development
of private enterprise. Such loans fall
under the definition of "commercial
loan."
It is not a question of extending a loan
of $30 million, or $50 million to Brazil,
for example, for a major program. AID
may make available a part of that money
to finance imports of goods, equipment,
and so on, for industrialization. That is
a typical program loan.
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18458 CONGRESSIONAL RECORD ? SENATE
We argued this question at great
length in connection with the previous
amendment. For that type of program
loan, the amendment now before us
would call for an interest rate of 3% per-
cent at the present time. That rate
would go up as our interest rate goes up.
That would certainly make it much
more difficult for them to try to finance
their own development. I do not know
whether the loan program could continue
to function at all. But the AID officials
have informed me that this amendment
would be a great obstacle to the use of
our funds in the development of private
enterprise in underdeveloped countries.
On the other hand, the committee has
been encouraged by all kinds of amend-
ments with regard to the guarantee
funds, and have had many exhortations
to develop private enterprise.
We are supposed to do everything we
can to encourage the development of
private enterprise. But this-amendment
creates considerably more severe terms,
and would make administration of the
lending program extremely difficult. It
would mean the Administrator would
have to decide, for example, whether a
loan might ultimately go to a fertilizer
factory, a factory that is in business for
profit, and privately owned, or a publicly
owned facility that is nonprofitmaking,
such as a dam.
Mr. SALTONSTALL. But it does go to
the government?
Mr. FULBRIGHT. It does go to the
government, that is correct. The pro-
gram loans are in accordance with the
criteria that we stipulate. For example,
under the Alliance for Progress a coun-
try may undertake certain reforms in
their tax system or land system or under-
take other so-called self-help programs
in order to become eligible for a loan in
support of their development plan.
That is a normal procedure.
There may be a private project that
the government is financing. For in-
stance, the letter referred to an auto-
mobile factory. That is a good example
of a loan that a recipient government
would make. It is also possible to make
a direct loan to such an enterprise.
Program loans normally are indirect.
They are made through the Government.
Money is made available by the Govern-
ment. In the case which the Senator
from South Dakota [Mr. MUNDT] men-
tioned, the foreign government pledges
to repay us in dollars at the end of the
term of the loan. The transaction be-
tween the government and the plant in-
volved would be in rupees. There is a
vast difference whether a plant repays in
rupees or not. The government 'assumes
the burden of making available foreign
exchange. That is where the real diffi-
culty lies. As the Senator knows, those
currencies are not convertible. No mat-
ter how may rupees are paid to the for-
eign goverment, the government must
somehow get dollars to repay us. I do
not think it is particularly relevant to
make the point that the foreign govern-
ment receives a higher rate of interest
paid in rupees than we get when the gov-
ernment is required to repay us in dol-
lars. That is the main problem we are
trying to attack in the whole AID prob-
lem program. Saying that they pay 6,
7, or 10 percent in rupees is not particu-
larly relevant if the government pays, as
it must, in dollars. Such talk breeds
confusion.
Mr. COOPER. Mr. President, will the
Senator yield?
Mr. FULBRIGHT. I yield.
Mr. COOPER. My question is an ex-
pansion of the question asked by the
Senator from Massachusetts. I started
by saying that I assumed the purpose
of the AID program was to encourage
countries to develop their own industries
and facilities in order to make progress.
Mr. FULBRIGHT. That is correct.
Mr. COOPER. We wish to see that
our assistance is used effectively and ef-
ficiently and is not wasted. We are
paid for our contribution. We receive
a reasonable rate of interest for it. But
the whole point of the program is to see
its ultimate purpose succeed. Other-
wise we would merely be turning over
our money for no purpose.
I gather from what the Senator has
said that he believes that the whole pur-
pose of a program?for example, the
Alliance for Progress program?if we
should place too restrictive limitations
on it, even with respect to interest, might
be defeated.
Mr. FULBRIGHT. I believe the .Sen-
ator is quite correct. We are not in this
business as a banker seeking to make
money. We have created the Import-
Export Bank for a certain purpose.
That institution has made a great deal
of money. We do not pretend to make
money out of AID operations. What-
ever benefit we receive is through help-
ing those countries to help themselves
and to grow.
That purpose is primarily political
and is intended to bring stability in the
world. It influences all aspects ?of our
international relations.
The program is not a scheme to make
money. I do not believe anyone would
attempt to justify it on that ground.
We wish to minimize the amount that
the program costs. That is quite cor-
rect. Under existing law, without the
amendment, interest rates are minimal.
They are not the maximum rates that
could be charged. However, when a
country begins to make some progress
and it is felt that it is capable of carry-
ing a larger burden, more interest is
charged. About $10 million in develop-
ment loans has been loaned at 31/2 per-
cent. Two percent is a minimum. That
rate of interest is in the law now. Sen-
ators will recall that in 1961 the policy
of requiring countries to obligate them-
selves to repay us in dollars replaced the
old grant and soft currency loan pro-
?grams: Initially, grants were made.
We realize now that if the Marshall plan
had been financed with dollar repayable
loans, even without any interest, we
would be $4 billion or $5 billion ahead?_
today. That would have been the case
if we had done then what we are doing
now under the law.
We provided the assistance partly in
grants and partly in loans. It could
have been all loans. The part designated
as grants should have yielded very low
August 11
interest rates. They could not all have
been serviced. They would have -had to
default if the interest had been too high.
? We are moving away from a grant pro-
gram. The area that was formerly
grants has largely become low interest
loans. These rates are the lowest rates
provided for any kind of loans. There
are some grants for schools and techni-
cal assistance purposes. But under the
Alliance for Progress program, all de-
velopment loans are now on the basis of
a minimum interest rate of 2 percent
with a 10-year grace, at three-quarters
of 1 percent and 40 years to repay.
The loans do not have to be repaid for 40
years. That is not the law, but that has
been the practice.
The amendment would provide a 25-
year limit, and would raise the rate of
interest to 3% percent on so-called com-
mercial loans, and 21/2 percent on non-
commercial loans. These would be
raised from 2 percent to 21/2 percent.
Mr. President, I submit that the
amendment would create the great risk
of making the program excessively diffi-
cult to administer, and would defeat the
whole purpose of the program, as the
Senator from Kentucky has put it.
Mr. SALTONSTALL. Mr. President,
will the Senator yield for one more ques-
tion? The procedure is somewhat diffi-
cult to understand.
Mr. FULBRIGHT. I yield.
Mr. SALTONSTALL. I should like to
state an example and ask if in substance
I am correct. A bank in Brazil might
make a loan in pesos to a commercial
customer in Brazil which would be re-
paid in pesos.
Mr. FULBRIGHT. We do not set the
interest charged by the bank in Brazil.
Mr. SALTONSTALL. No. I say in
Substance that we would try to tell them
'what interest rates they should -charge.
:Would we not?
Mr. FULBRIGHT. No. The amend-
ment relates to what they would agree
to pay us. The amendment states that
-the loan agency cannot lend at less than
3% percent interest under present con-
ditions. That is 0.75 percent over the
average rate of our loans?that is, in the
case of so-called commercial loans.
Mr. SALTONSTALL. That means
-that the bank in Brazil would be required
to charge more than that rate.
Mr. FULBRIGHT. I am sure that it
would have to charge more. The signifi-
cant part about the argument that they
-would charge a great deal more is that
'the lenders would pay the Government of
Brazil in cruzeiros. In their own coun-
try they deal in cnizeiros. However,
they must repay us in dollars, and that
is the essential difficulty in all these
cases.
The program is very difficult. If we
are to have such a program, it should be
made workable. A chance to administer
it successfully should be afforded.
It would be better to end the program
than to try to tie the borrowers down
with unworkable requirements and then
complain.about the bad job they do.
The amendment is similar to the so-
:called selection-out amendment about
which we argued the better part of a
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41.?
1964
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CONGRESSIONAL RECORD ? SENATE
day last week. If we are to allow the
Agency to operate, we ought at least to
give it the same opportunity that we
have given the Foreign Service to select
out their personnel in order to improve
the quality of their operations. We
quarreled about that subject the other
day. If we are to impose conditions on
the program that would make it virtu-
? ally impossible to operate, why not end
the program and say, "Let us have no
more development loans"? If we are to
undertake the program, we ought to give
the administrators of the program a rea-
sonable amount of discretion. I know
of no complaint about this aspect of it.
The complaints have usually been with
regard to administration of the military
program. With all deference, I suggest
that in the military area those countries
have been given a vast quantity of arms
that they were unequipped to maintain
properly and utilize.
Many of the most startling stories
have concerned the military aid pro-
gram. In this particular area I do not
know that there has been great com-
plaint.
I point out again that the program was
undertaken in response to our urging
that it be changed from one consisting
of grants to one consisting of loans with
low interest rates. The nations receiving
the loans would pledge themselves to re-
pay us in dollars. Our experience under
the Marshall plan indicated that such a
plan would be a great improvement. If
we set interest rates at a level which
would approach commercial rates, the
program would no longer be an aid pro-
gram. We might as well stop it and let
those desiring loans go to the Interna-
tional Bank or the Chase National Bank
and see if they could not do business in
that way. The experience is that they
have not been able to obtain loans in that
way, in the past.
Mr. MUNDT. Mr. President, will the
Senator yield?
Mr. FULBRIGHT. I yield.
Mr. MUNDT. The Senator has ex-
plained the financial terms of the amend-
ment correctly. I should like to address
a statement to the Senator from Massa-
chusetts [Mr. SALTONSTALL], but I see
that he has left the Chamber.
_ Mr. FULBRIGHT. Direct it to me. I
shall listen.
Mr. MUNDT. I shall make the state-
ment for the benefit of the RECORD, and
the Senator from Massachusetts can read
it in the RECORD tomorrow. There is an
.element in the amendment which moves
in the direction of what the Senator from
Massachusetts was talking about. I re-
fer to lines 5 and 6, where the provision
appears:
Funds made available for this title shall
not be loaned or reloaned at rates of interest
excessive or unreasonable for the borrower.
Mr. FULBRIGHT. That provision is
in the present law. That is a policy
statement in the law already. That is
not new.
Mr. MUNDT. That is correct. That
is in conjunction with the new interest
rate. When Joe Valachi of Cosa Nostra
was before the Subcommittee on Investi-
gations headed by the distinguished col-
No. 156 25
league of the Senator from Arkansas, he
said that among criminals there was a
practice called Shylocking.? They would
collect money at one rate of interest and
someone would get into trouble, and they
would Shylock the interest rates to
astronomical levels.
A great deal of ."shylocking" has been
going on with our American money over-
seas. I gave an example of an auto com-
pany in India. There are other places
where the borrowing nation can get
money from us at three-quarters of 1
percent and the foreign government gets
anywhere from 10 to 15 or 20 percent in-
terest, a sort of blending of interest and
other charges, and still has to pay only
three-quarters of 1 percent.
Mr. FULBRIGHT. I do not see that
the Senator's argument provides a rea-
son to vote for his amendment, because
under section 201(d) of the act, it is
provided:
Funds made available for- this title shall
not be loaned or reloaned at rates of interest
excessive or unreasonable for the borrower
and in no event shall such funds (except
funds loaned under section 205 and funds
which prior to the date of enactment of the
Foreign Assistance Act of 1963 were author-
ized or permitted to be loaned upon terms
Which do not meet the minimum terms' set
forth herein) to be loaned at a rate of in-
terest of less than 2 per centum per annum
commencing not later than ten years follow-
ing the date on which the funds are initially
made available under the loan.
That is in the law. There is no rea-
son to vote for the Senator's amend-
ment. It is already in the law.
Mr. MUNDT. This amendment re-
lates to a new program, providing for
charging something at least resembling
commercial rates for people who are bor-
rowing money to go into enterprises for
profit. The Senator said he had difficul-
ty knowing just what is Meant by a com-
mercial loan. It is set out in the amend-
ment on pages 2 and 3. I read from it:
(A) the term "commercial loans" includes
loans made, as determined by the President,
for the development of productive enter-
prises or facilities directly used in the opera-
tion of productive enterprises, such as equip-
ment, machinery, supplies, or materials, and.
for the acquisition of land necessary for the
development of productive enterprises or
facilities, and
(B) the term "noncommercial loans" in-
cludes all other loans.
So it would specifically apply to the
Premier Automobile Co., which is sym-
bolic.
Mr. FULBRIGHT. What about a port
or a railroad?
Mr. MUNDT. If it were a privately
owned railroad, it would come under the
heading of commercial loans. If it were
a Government railroad operated for the
benefit of the people at a loss, it would
not so qualify. The question would be
determined by the President.
Mr. FULBRIGHT. In effect what the
Senator is doing is encouraging them to
be socialistic. He would raise the inter-
est rate for loans for private enterprise
and keep them low for Government en-
terprises. It is directly contrary to what
the Senator and many of his colleagues
have complained about in the past.
Mr. MUNDT. It seems to me that the
18459
cases mentioned by the Senator from
Arkansas are rare. There are some un-
derdeveloped countries that cannot pay
21/2 percent. We propose to give them a
grant and tell them it is a grant: We
do not try to deceive the people by say-
ing it is a loan when they pay only three-
fourths of 1 percent and. do not have to
repay it for 40 to 50 years, and nothing
at all for 10 years. That is not a loan.
That is a masquerade party, because
there Is no possibility of collecting what
is due us under those terms.
Mr. FULBRIGHT. If we had loaned
France money at no interest at all, un-
der the Marshall plan, we would be
happy to get the loan back. I regret
very much we did not do that, instead of
loaning them the $5 billion as we did.
France's repayments are current under
the loans made through the Marshall
plan.
If countries agree to repay a loan, I
cannot understand that it is a grant, even
though there is no interest.
Mr. MUNDT. Let me explain it by
simple, South Dakota arithmetic. If we
borrow money at 3% percent, and lend
it for 50 years at three-quarters of 1
percent, over that period of time?
Mr. FULBRIGHT. It is 40 years, not
50 years.
Mr. MUNDT. With a 10-year grace
period. Very well, let us take 40 years.
If we borrow money at 3% percent and
we receive three-quarters of 1 percent
for 40 years, the difference between
those two is well over 100 percent. It
is not only a grant, but a grant with a
bonus, because the country is receiving
more than the original grant. That is
an arithmetical process on which the
Senator from Arkansas and the Senator.
from South Dakota should be able to
agree.
Mr. FULBRIGHT. I do riot follow
the Senator's arithmetic.
Mr. MUNDT. I will say_ it again.
Mr. FULBRIGHT. I do not want the
Senator to repeat it. I heard what he
said. I do not agree with him.
Mr. MUNDT. How can the Senator
disagree?
Mr. FULBRIGHT. In the first place,
the Senator said it was 50 years rather
than 40 years.
Mr. MUNDT. I will take 40 years as
the basis.
Mr. FULBRIGHT. The three-quar-
ters of 1 percent applies for 10 years.
The remainder is at a minimum of 2
percent. In certain cases, more than
that amount has been charged-310 mil-
lion has been loaned at about 31/2 percent
since the act was chanded. This was to
take the place of grants.
We are speaking of the poorest places..
Where countries can qualify, they can
borrow from the International Bank or
the Export-Import Bank. One of the
criteria for getting these loans is that
a country cannot borrow it from an es-
tablished lending program. If a coun-
try had the kind of credit that entitled
it to get money under normal commercial
conditions, the Administrator would be
bound to tell it to get it from the Inter-
national Bank or the Export-Import
Bank or the Chase Bank. These in-
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18460 CONGRESSIONAL RECORD ? SENATE
stitutions have plenty of money to lend
on the premise the Senator is trying to
establish, assuming a reasonable basis
for what the Senator proposes.
Mr. MUNDT. Will the Senator yield
further?
Mr. FULBRIGHT. I yield.
Mr. MUNDT. I am advocating that
this country lend the money at the same
rate that the Government has to pay the
taxpayers in borrowing the money.
Suppose there is a one-quarter of 1 per-
cent service charge as the halfway house
between giving it to them as a grant and
forcing them to go to the Export-Import
Bank or other place to borrow. This is
another step in giving them what they
need, in making a legitimate loan to use
the money for profit, and to pay what
they would have to pay for borrowing
through a commercial loan. The 21/2-
percent loan, which is going to cost the
United States 11/4 percent over that, goes
for noncommercial purposes. The third
is for the one who cannot pay 21/2 per-
cent and who cannot pay the commercial
rate. We give them a grant.
So we cover the area from the country
that is worse off to those that cafiget the
money at 21/2 percent to those from
which we can recapture a reasonable in-
terest rate and the money loaned for a
private enterprise, moving finally into
the area of the Export-Import Bank, the
International Bank and commercial
loans. To me that is a plausible, sen-
sible, and realistic manner of handling
the program rather than trying to delude
ourselves and say generally that we are
lending at three-quarters of 1 percent,
when, in fact, any reasonable man knows
it is a grant, because we will not get it
back and our interest loss may well equal
or exceed the amount of the loan prin-
cipal involved.
Mr. FULBRIGHT. In the first place,
it is not for 40 years at three-quarters of
1 percent. That is only during the first
10 years. The Senator has repeatedly
said it is a loan at three-quarters of 1
percent. That is only for the first 10
years. Thereafter it is at a minimum of
2 percent under existing law.
Mr. MUNDT. After the grace period.
Mr. FULBRIGHT. After the 10 years.
Then, beginning with the 30-year pe-
riod, it goes to 2 percent. The Senator
says he would rather give them a grant,
because we are fooling the people. If
we give them a grant, we lose not only
the interest, but also the principal. The
Senator atiparently believes that there
is no virtue in having the principal re-
paid. ?Many people would like to get the
principal of a loan repaid even without
the interest. There is no logic in the
Senator's argument. I read from section
201 of the act:
In so doing, the President shall take into
account (1) whether financing could be ob-
tained in whole or in part from other free
world sources on reasonable terms, includ-
ing private sources within the United States.
It is very similar to what happened in
connection with the RFC. It was not
possible to get a loan from the RFC if
a person had sufficient credit to get it
from a bank. It was necessary to prove
that it was impossible to obtain it from
a bank or a private source on reasonable
terms before the RFC would grant a
loan.
Mr. MUNDT. That would be true un-
der our amendment. It is a halfway
house between a three-quarters of 1
percent loan and a loan which would
be obtained at prevailing rates fh:oin the
International Bank or the Export-Im-
port Bank or a commercial bank.
Mr. FULBRIGHT. It is practically
the same issue that we voted on a short
time ago, except that a distinction is
made between commercial loans and
noncommercial loans.
Mr. JAVITS. Mr. President, will the
Senator yield?
Mr. FULBRIGHT. I yield.
Mr. JAVITS. Is not the fundamental
problem which we face here that we are
not engaged in this undertaking because
we are in the business of lending money,
but because of a high governmental pur-
pose?
Mr. FULBRIGHT. A political pur-
pose.
Mr. JAVITS. We are trying to effec-
tuate political results.
Mr. FULBRIGHT. Yes.
Mr. JAVITS. Hence, reasonable flex-
ibility in the hands of the one who is
dealing the cards is something to be kept
rather than to be given away.
Mr. FULBRIGHT. I agree with the
Senator. The proposal would do serious
injury to the whole program. It is much
more serious than the reduction in the
amount. A reduction, if it is handled
with some discretion and in an effective
way, is better than the proposal before
us now, which amounts to a kind of re-
striction that would hamstring the pro-
gram. I consider this a much more seri-
ous amendment than the one we voted
on previously.
Mr. AIKEN. Mr. President, will the
Senator yield?
Mr. FULBRIGHT. I yield.
Mr. AIKEN. If I thought that the
people we were trying to help in other
countries were actually getting the
money at 51/2 or 6 percent, I would be
very glad to go along with even making
grants to their lending institutions or
lending the money at low rates of
interest.
However, I do not think we should be
deluded into thinking that people in
other countries get the money for 51/2
percent or 6 percent. The big money in
making loans in some of the countries
where we are investing comes in the
service charges. The Senator from
Arkansas and the Senator from South
Dakota both referred to financing an
automobile business in another country.
I happen to know of an automobile in-
dustry, and it is a big one, with A-1
credit, in another country, to which we
have been lending a great deal of money.
They are paying 22 percent, and getting
the money. the cheapest of anyone in
that area, and that includes the service
chaiges as well as the interest rate. I
believe Senators will find that that prac-
tice is still prevalent. I know it is good
business for our banks and for the banks
in those countries to lend money, and
some of our own banks in this country
August 11
are pretty well up on the matter of serv-
ice charges, too. But that is where the
cost comes in. We are making a little
progress in that direction. I believe in
one country some loans have been made
for housing on which the lenders are
actually getting 11 or 12 percent. The
legal interest rate is 8 percent. The
service charges have been cut down. The
building and loan associations have been
very helpful, in my estimation, in bring-
ing them down. I am sure that some
bankers would rather lend more money
at a lower rate and perhaps make less
profit on it.
I do not think that we should take as
gospel any assertion that people in other
countries are borrowing money which we
put in those countries for 51/2 or 6 per-
cent, when they are paying 4 or 5 times
that much. That is something with re-
spect to which I think our Government
has been negligent. I do not believe our
Government has been careful enough.
We want to see them get the money at
the rate they should pay.
Mr. MUNDT. Mr. President, I ask for
the yeas and nays on the amendment.
The yeas and nays were ordered.
The PRESIDING OFFICER. The
question is on agreeing to amendment
No. 1177, offered by the Senator from
South Dakota [Mr. MUNDT] on behalf of
himself, the Senator from Ohio [Mr.
LAUSCHE], and 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. MONRONEY (when his name was
called) . On this vote I have a live pair
with the senior Senator from Louisiana
[Mr. ELLENDER]. If he were present, he
would vote "yea." If I were at liberty
to vote, I would vote "nay." I withhold
my vote.
Mr. HUMPHREY. I announce that
the Senator from Tennessee [Mr. Wm.-
TERs], the Senator from Louisiana ['Mr.
LONG], and the Senator from Georgia
[Mr. ELLENDER] 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], and the
Senator from Oklahoma [Mr. EDMOND-
sox] are necessarily absent.
I further announce that, if present arid
voting, the Senator from Louisiana [Mr.
LONG] and the Senator from Pennsyl-
vania [Mr. CLARK] would each vote
"nay."
Mr. KUCHEL. I announce that the
Senator from Nebraska [Mr. HRusKA]
and the Senator from Kentucky [Mr.
MORTON] are necessarily absent.
The Senator from Arizona [Mr. GOLD-
WATER] is-detained on official business.
On this vote, the Senator from Ne-
braska [Mr. HRUSKA] is paired with the
Senator from Kentucky [Mr. MORTON].
If present and voting, the Senator from
Nebraska would vote "yea" and the Sen-
ator from Kentucky would vote "nay."
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/964 CONGRESSIONAL RECORD ? SENATE 18461
The result was announced?yeas
nays 38, as follows:
[No. 536 Leg,]
YEAS-50
Aiken
Allott
Beall
Bennett
Bible
Boggs
Burdick
Byrd, Va.
Byrd, W. Va.
Carlson
Case
Cotton
Curtis
Dirksen
Dodd
Dominick
Eastland
Bartlett
Bayh
Brewster
Church
Cooper
Douglas ,
Fulbright
Hart
Hartke
Hayden
Hickenlooper
Hill
Holland
Ervin
Fong
Gore
Gruening
Jackson
Johnston
Jordan, N.C.
Jordan, Idaho
Kuchel
Lausche
McClellan
McIntyre
Mechem
Morse
Moss
Mundt
Pearson
NAYS-38
Humphrey
Inouye
Javits
Keating
Long, Mo.
Magnuson
Mansfield
McCarthy
McGee
McGovern
McNamara
Metcalf
Miller
NOT VOTING-12
50,
Prouty
Proxmire
Robertson
Russell
Scott
Simpson
Smith
Stennis
Symington
Talmadge
Thurmond
Tower
Williams, Del.
Yarborough
Young, N. Dak.
Young, Ohio
Muskie
Nelson
Neuberger
Pastore
Pell
Randolph
Ribicoff
Salinger
Saltonstall
Smathers
Sparkman
Williams, N.J.
Anderson Ellender Long, La.
Cannon Goldwater Monroney
Clark Hruska Morton
Edmondson Kennedy Walters
So Mr. MuNnT's amendment, offered
for himself, Mr. LAIISCHE, Mr. MORSE, and
Mr. DOMINICK, was agreed to. ,
Mr. MORSE. Mr. President, I move
that the vote by which the amendment
was agreed to be reconsidered.
Mr. MUNDT. 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. DOMINICK. Mr. President, I call
up my amendments Nos. 1193 and 1194
and ask that they be stated.
The PRESIDING OFFICER (Mr. HART
in the chair). The amendments of the
Senator from Colorado will be stated en
bloc for the information of the Senate.
Mr. DOMINICK. Mr. President, I ask
unanimous consent that the reading of
the amendments be dispensed with.
The PRESIDING OFFICER. With-
out objection it is so ordered; and the
amendments will: be printed in the
RECORD at this point.
The amendments No. 1193 and No.
1194 submitted by Mr. DOMINICK are as
follows:
AMENDMENT No. 1193
On page 1, between lines 6 and 7, insert
the following:
"TITLE I?DEVELOPMENT LOAN FUND
"SEc. 101. Section 203 of the Foreign As-
sistance Act of 1961, as amended, which re-
lates to fiscal provisions with respect to de-
velopment loants, is amended to read as fol-
lows:
" 'SEC. 203. FISCAL PROVISIONS.?All receipts
from loans made under and in accordance
with this title shall be available for use for
the purposes of this title, subject only to the
annual appropriation thereof. Receipts so
appropriated and other funds made available
under this title for use for the purposes of
this title shall remain available until ex-
pended.' "
Redesignate the succeeding sections of part
I, accordingly.
AMENDMENT No. 1194
On page 4, line 5, after "SEC. 104." insert
"(a) ".
On page 4, between lines 13 and 14, insert
the following:
"(b) Section 253 of the Foreign Assistance
Act of 1961, as amended, which relates to
fiscal provisions, is amended by amending the
first sentence thereof to read as follows: 'All
receipts in United States dollars from loans
made under this title and from loans made
for the benefit of countries and areas of Latin
America under title I of chapter 2 of part I
of this Act, notwithstanding section 203,
shall be available for use for loans payable
as to principal and interest in United States
dollars in furtherance of the purposes of this
title, subject only to the annual appropria-
tion thereof.'."
Mr. DOMINICK. Mr. President, I
shall explain amendment No. 1193 very
briefly. This amendment is designed to
cure a situation in the authorization bill
which would permit repayments to the
Development Loan Fund to be expended
again by the agency executive members
without any review, or without any con-
sideration by Congress in the appropria-
tions or otherwise.
I offered the amendment last year,
and one similar to it on the Alliance for
Progress, and the chairman of the com-
mittee was kind enough to take them to
conference. We lost, them in confer-
ence. I suspect that part of the reason
for losing them was that the appropria-
tion bill contained a specific provision,
and perhaps I should read it, because this
is the 1963 act. It provides:
-Receipts of United States dollars in the
Development Loan Fund and the Alliance for
Progress revolving fund deriving from loan
-repayments and interest collections may
hereafter, when so specified in appropria-
tion acts, be used for the purposes for which
such revolving funds are available.
The negative of that, I would presume,
is that if they are not so specified, they
may not be so used. Yet the authoriza-
tion act specifically stated that they
could be used for almost any purpose.
I have been in touch with the distin-
guished chairman of the Foreign Rela-
tions Committee, and also with the legis-
lative counsel, and they inform me that
this portion of the 1963 appropriation
act; which is not repeated in the 1964
act, is probably permanent legislation
which will eventually be codified. It is
not codified now. So my amendment, if
adopted, would put into the authoriza-
tion act a provision which would con-
form substantially with what is already
in the appropriation act, if the appro-
priation act does not become permanent
legislation and is not in effect. There
seems to be a small question on this
point. This would give Congress the
authority to review what should be done
with the repayments of the loans under
the Development Loan Fund. I have a
similar amendment for the Alliance for
Progress fund.
We are not dealing in peanuts. A vast
amount of money will be coming in, both
in interest repayments and private re-
payments. At least, we hope so, because
? all the money that goes out over a period
of time is presumably going to come back
into the revolving fund.
I am not touching the revolving fund
at all. I am only saying that the money
that comes back in should be, in my
opinion, at least subject to congressional
review, and subject to the appropriation
process. That is what my amendment
would accomplish. I should like to have
an expression from the Senator from
Arkansas on his position.
Mr. FULBRIGHT. The Senator has
correctly stated the situation. The Ap-
propriation Act for 1964 carries, in sec-
tion 11'7, the substance of his amend-
ment. We accepted it last year. It was
taken out in conference because it was
considered superfluous. It was superflu-
ous then, and I believe that it is
superfluous now. But I have no objec-
tion to taking it to conference. It does
not add anything to the bill. The Con-
gress, under the provisions of the Ap-
propriation Act?which incidentally is
permanent legislation, the legislative
counsel has informed me?does conduct
annual reviews and the Appropriations
Committees go over them.
I do not believe that there is the
slightest doubt that section +117 effects
its purpose. Therefore, in order to save
the time of the Senate, I am perfectly
prepared to take the Senator's amend-
ments to conference. I am prepared to
have them in the authorization bill, if the
House will agree. It is not one of those
things which mean a fight to the death
when it is pointed out it is already in the
law.
That is the situation. If the Senator
wishes to insist on his amendments, I am
willing to accept them. I cannot vote
against them, because they are the law.
Mr. DO1VITNTrIK. I appreciate the
comments of the Senator from Ar-
kansas. So far as the original appropria-
tion bill in the House is concerned, this
is probably legislation on an appropria-
tion bill.
Mr. FULBRIGHT. It certainly is.
Mr. DOMINICK. So far as the House
is concerned, it would have been subject
to a point of order.
Mr. FULBRIGHT. But not in the
Senate.
Mr. DOMINICK. But not in the Sen-
ate. This I agree. It is entirely possible
that, of course, in future considerations
of these bills the provisions might easily
be stricken.
SI, if the chairman will take them to
conference, I shall be willing to leave it
at that, and shall not ask for a yea-and-
nay vote.
I ask the Senator from Arkansas if he
will accept my amendment No. 1194, on
the Alliance for Progress, on the same
basis.
? Mr. FULBRIGHT. I shall be glad to
do that.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ments of the Senator from Colorado.
The amendments were agreed to.
Mr. JAVITS. Mr. President, I call up
my amendment No. 1112 and ask that it
be stated.
The PRESIDING Or F.I.CER. The
amendment of the Senator from New
York [Mr. JAvirs1 will be stated for the
information of the Senate.
The LEGISLATIVE CLERK. It is proposed
by the Senator from New York:
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18462 CONGRESSIONAL RECORD ? SENATE
On page 1, between lines 5 and 6, insert
the following new material:
"CHAPTER 1?POLICY
"SEC. 101. Section 102 of the Foreign As-
sistance Act of 1961, as amended, which re-
lates to the statement of _policy, is amended
by adding at the end thereof the following
new paragraph:
"'It is the policy of the United States to
encourage the efforts of our colleges and
universities to participate in programs of
development and research in the less de-
veloped friendly countries, and to strengthen
the partnership between the United States
Government and these institutions of higher
education, by all available means including
increasing and facilitating interchange of
personnel.'"
In part I renumber the succeeding sec-
tions accordingly.
Mr. JAVITS. Mr. President, this
amendment is designed to add to the
policy statement already in the bill, en-
couragement for further participation
by the colleges and universities in the
program of foreign aid.
The amendment is inspired by my con-
ferences with the department, following
the report of John W. Gardner, president
of Carnegie Corp of New York, and the
task force which he headed in the effort
to facilitate participation by universities
and colleges in this program.
Mr. President, if there is one thing
that I believe we can all agree on, it is
that the maximum effort in foreign aid
should be made by the private sector,
and that there is no more desirable as-
pect of the private sector than the col-
leges and universities.
The participation which they have in
the program has grown, but the feeling
in the Gardner report was that it has
not grown as much as it should.
The tremendous potential of this pro-
gram in the overall foreign aid program
was the subject earlier this year of a
special task force study directed by
President John Gardner of the Carnegie
Corp. The study was undertaken at the
request of David Bell, Administrator of
AID, and it focused on the relationships
of that agency with the universities en-
gaged in this program. Nongovern-
mental niembers of the task force, in
addition to Mr. Gardner, included Presi-
dent William Friday, of the University of
North Carolina; Charles P. McCurdy,
Jr., Association Of American Univer-
sities; Roger Revelle, dean of research,
University of California; President Lo-
gan Wilson, American Council on Edu-
cation; Russell I. Tha,ckrey, Association
of State Universities and Land Grant
Colleges; President 0. Meredith Wilson,
University of Minnesota; and President
William W. Marvel, Education and World
Affairs.
Mr. President, in 1963, AID had 235
contracts for technical assistance for
education in developing countries with
American colleges and universities. One
hundred twenty-nine of these were with
72 universities for projects in 40 coun-
tries.
In India alone, 5 midwest universities
have been working under contracts since
1954 to establish a system of 15 land-
grant universities by 1970. Institutions
in my own State, such as Cornell and
Syracuse, are among the 35 universities
working in Latin America, Columbia
Teachers College, for example, is helping
to expand and improve education in
India, Afghanistan, Kenya, and Peru.
I know that the chairman of the com-
mittee is not anxious to extend this. I
would not press this upon him except for
the fact that the Gardner report received
so much notice publicly and was ex-
tremely well received.
I hope that the Senator will accept the
amendment.
Mr. FULBRIGHT. I do approve it.
My only objection is that the policy state-
ment is already in the act. At one point,
the committee almost had the good sense
to take out the whole cumbersome policy
statement in the act but it was retained
over my objection. I am prepared to ac-
cept the amendment since the committee
endorsed it within a long policy state-
ment anyway. I certainly do not object
at all on its merits.
Mr. JAVITS. I thank the Senator.
Mr. MORSE. Mr. President, I am de-
lighted that the Senator will take it to
conference. I have shared the view of
the Senator from New York [Mr. JAVITS],
and it has been the point of view of the
Senator from Arkansas [Mr. Funnucarl
and others, thit-it involves no additional
money, and gives encouragement to the
State Department and the AID depart-
ment to carry it out in keeping with the
objective.
I think it is a fine program. I com-
mend the Senator.
Mr. JAVITS. Mr. President, I thank
the Senator. I ask unanimous consent
that I may include an excerpt from a lei-
ter by Francis Keppel, U.S. Commissioner
of Education, dated July 25, and an edi-
torial entitled "Most Popular Export,"
which appeared in the Washington Post
July 29. 1964, in the RECORD.
The PRESIDING OFFICER. Without
'tion, it is so ordered.
DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE,
OFFICE OF EDUCATION,
Washington, D.C., July 25, 1964.
Mr. ALLEN LESSER,
Committee on Labor and Public Welfare,
U.S. Senate,
Washington. D.C.
DEAR ALLEN: * * * Senator JAVITS' amend-
ment would make an important contribution
in giving recognition to the unparalleled re-
sources of American higher education as a
positive instrument of . American foreign
policy. The findings of the Gardner report
would seem to substantiate full well the
important role which our colleges and uni-
versities have yet to play in the programs Of
the Agency for International Development
and other foreign assistance programs.
Sincerely yours,
FRANCIS HEPPEL,
U.S. Commissioner of Education.
[From the Washington Post, July 29, 1964]
MOST POPULAR EXPORT
If any American experiment has suc-
ceeded with a vengeance, it is the land-grant
college. Created by the Morrill Act of 1862,
land-grant colleges were intended to help
America harvest an abundance of food. Our
chronic farm surpluses amply testify to the
success of this Federal help for agricultural
education. Why shouldn't the country's
land-grant colleges enlarge their horizons to
include rural ? development elsewhere in a
hungry world?
August- 11
We asked this question in an editorial 2
years ago observing the centennial of the
Morrill Act, and it is a pleasure to note that
just such a development is taking place.
During this week, more than a score of State
university presidents have been .attending
an International Rural-Development Con
ference at the State Department. The
gathering reflects the fact that more than
100 American universities have up to $200
million in contracts from the AID agency,
mainly in the field of agriculture.
AID Administrator David Bell cited the
work of North Carolina State and Iowa
State universities as examples of the broad-
ening involvement of land-grant schools in
foreign aid. Iowa State is helping the
Peruvian Government to shape a national
rural development plan, giving special em-
phasis to land tenure problems. North Car-
olina has staff members working at the na-
tional agricultural university in La Molina
and in a half dozen other cities assisting
Peru in developing a combined program of
farm education and research.
What is especially admirable about such
programs is that they enroll the energies of
nongovernmental institutions in the tasks
of foreign aid. The size and scope of these
programs has become so broad that one rec-
ommendation made at the conference this
week was to appoint a full-time representa-
tive in Washington of the land-grant col-
leges in order to work with the AID agency.
As Secretary of Agriculture Freeman em-
phasized in a speech to the college presi-
dents, the effect of greater farm productivity
elsewhere is not to diminish markets for our
exports. Instead, experience in Japan and
Europe demonstrates that our exports in-
crease as other countries expand their in-
come and their economies.
The University of Wisconsin has the proud
slogan that the boundaries of its campus
are the boundaries of the State. With the
increased participation of land-grant col-
leges in international rural development,
those boundaries are stretching to the re-
mote corners of the world. Both our farm
technology and our agricultural schools are
among our most obvious assets in the com-
petition with communism. Russell Thack-
rey of the Association of Land-Grant Col-
leges is quite right in saying that "in all
those countries of the free world which are
striving for a better life * *. * the idea of
the land-grant university is America' nioLt
popular export."
The PRESIDING OFFICER (Mr. HIRT
in the chair) . The question is on agree-
ing to the amendment of the Senator
from New York [Mr. JAviT51.
The amendment was agreed to.
Mr. MANSFIELD. Mr. President, I
suggest the absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. MANSFIELD. Mr. President, I
ask unanimous consent that the order for
the quorum call be rescinded.
I The PRESIDING OFFICER. Without
oU2legtion, it is so ordered.
RELEASE OF LIABILITY UNDER
CERTAIN BONDS
Mr. MANSFIELD. Mr. President, I
ask unanimous consent that the pending
business (H.R. 11380) be temporarily laid
aside.
The PRESIDING OFFICER. Is there
objection? Without objection, it is so
ordered. /
Mr. MANSFIELD. Mr. President, I
ask unanimous consent that the Senate
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300090005-6