MR. MCNAMARA FACES BOTH WAYS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70B00338R000300110002-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 19, 2016
• Document Release Date: January 9, 2006
• Sequence Number: 2
• Publication Date: September 25, 1967
• Content Type: OPEN

Approved For Release 2006/01/30 : CIA-RDP70B00338R000300110002-1
September 25, 1967 CONGRESSIONAL RECORD - SENATE S 13537
months, Only four point up toward further
expansion and two are moving sideways.
Overall, this box score is actually slightly
less optimistic than one compiled in a simi-
lar review of the leaders in this column on
July 17. At that time, six of the 12 leaders
pointed up and six pointed down.
Among the key indicators that point down
are some that most economists regard as es-
pecially reliable forerunners of overall busi-
ness activity. One is the statistical series
measuring new factory orders for durable
goods. The volume of these orders dropped
in August for the second straight month.
The record for new orders was set all the way
back in September 1966. Another yardstick
that has recently turned down is the series
that measures contracts and orders for new
plant and equipment. Other leaders pointing
toward slower business are job placements
in nonagricultural industries, net new busi-
ness formations, the net change in consumer
installment debt and the ratio of prices to
unit labor costs in manufacturing.
The leading indicators that suggest busi-
ness will continue to expand are the average
workweek of production workers, the change
in the book value of manufacturing and
trade inventories, corporate profits after
taxes and stock prices, which on average
have been higher in September so far than in
August. The indicators that point approxi-
mately sideways are industrial material prices
and new private housing permits.
The recent overall performance of the key
leading indicators, it is noteworthy, isn't the
only bit of evidence suggesting business may
not necessarily be entering a boom period.
Among other factors, of course, is the strike
at Ford Motor Co., which started early this
month, after the latest reporting period for
most of the key indicators. The Ford shut-
down, while not an overriding influence in
the general economy, undoubtedly will tend
increasingly to slow overall business as it goes
on.
In this connection, a top economist at the
Federal Reserve Board estimates that the
impact of the strike will "knock about two
points" off this month's industrial produc-
tion index. Partly for this reason, the econo-
mist predicts that the country's output in-
dex, which stood at 158% of the 1957-59 base
in August, will decline in September. "There's
hardly any question about it," the economist
says. As the Ford strike continues, he adds,
"more and more firms that supply Ford will
be forced to cut back operations."
The Federal Reserve official also notes that
some "very special factors" contributed to
August's 1.3-point rise in industrial produc-
tion. Roughly half the increase, he says, can
be traced to a sharp rise in crude oil produc-
tion because of curtailment of Mideast sup-
plies. Now, with more oil flowing from the
Arab states, crude oil output is running be-
low the high August levels. Other special fac-
tors, the economist says, included sharp out-
put gains in the rubber and electronics in-
dustries following strikes.
Taking such considerations into account,
and allowing for new plant facilities now
coming on stream, the Government analyst
reckons that U.S. manufacturers currently
are using only about 85% of their full pro-
duction potential, no higher than in the
year's second quarter when there was far less
talk about inflation. And-the recent speedup
in consumer prices notwithstanding-eco-
nomic history shows that troublesome, sus-
tained inflation is rare when plant operations
drop much below 90% of capacity.
ANALYSIS OF SECRETARY McNA-
MARA'S TESTIMONY ON THE
BOMBING OF NORTH VIETNAM
Mr. FULBRIGHT. Mr. President, in
the "Talk of the Town" feature of the
September 16 issue of New Yorker mag-
azine, there is a perceptive commentary
on Secretary McNamara's testimony be-
fore the Senate Preparedness Subcom-
mittee on thQ policy of bombing North,
Vietnam.
After examining Secretary McNa-
mara's testimony in the light of the an-
nounced objectives of the bombing pol-
icy, the writer concludes:
The Secretary ... has told the careful
reader that, even putting moral considera-
tions aside, the bombing is not worth its
enormous cost in men and planes, its aliena-
tion of our allies, the incredulity or disgust
it has aroused throughout the world, or its
undeniable diminution of chances for a
negotiated settlement.
I ask unanimous consent to have the
article printed in the RECORD at this
point.
There being no objection, the article
was ordered to be printed in the Record,
as follows:
NOTES AND COMMENT
Perhaps because it is encased in the stolid
monotone of Pentagon-committee language,
Secretary McNamara's testimony before the
Senate Preparedness Subcommittee on the
bombing of North Vietnam has not been
generally greeted as the astounding docu-
menti it is. The Secretary himself has helped
to dull reaction by omitting the obvious con-
clusions to be drawn from his analysis. As
a result, the "debate between McNamara and
the generals" has been understood to in-
volve an arugment over the wisdom of fur-
ther escalation, whereas in fact the
McNamara statement cuts the heart out of
the military case for bombing North Viet-
nam at all. Since our stated national objec-
tives do not include the overthrow or de-
struction of North Vietnam, the only mili-
tary justification for the bombing is that it
will shorten the war in the South, or, at
least, reduce the war's cost, in life and
money, and McNamara has virtually demon-
strated that it does neither.
Three claims are basic to the official
rationale. The first is that the bombing slows
down the infiltration of men and supplies
into the South. Yet the Secretary points out
that no level of bombing short of complete
obliteration can keep the North Vietnamese
from supplying and reinforcing their troops
in the South, either at the current level or
at a much higher one. The reason has been
clear to -almost every outside observer for
a long time. North Vietnam does not manu-
facture weapons. It is not the source of sup-
ply. It is simply a rather sprawling way sta-
tion for goods on their way from the Soviet
Union and China. Tens of thousands of tons
of materiel must be moved through North
Vietnam each day simply to keep the coun-
try going. Yet, as McNamara indicates, only
between one hundred and two hundred
tons--a few dozen truckloads-a day, at the
most, is needed to supply the conflict in the
South. As long as North Vietnam gives
top priority to this vital but tiny trickle,
there is no way to halt it. To attempt to do
so by bombing is a little like building Grand
Coulee Dam to stop a leaky faucet. Moreover,
the infiltration has been steadily increasing.
When the bombing began, there were four
hundred North Vietnamese regulars in the
South; now there are more than forty
thousand, and no evidence exists that there
is any limit on further increases except the
limit imposed by Hanoi's tactical judgment.
The second claim, or hope, is that bombing
may break the will of the North Vietnamese
and bring them to the conference table--or,
even better, force them to give up. All the
evidence, including the reports of detached
observers, is that Hanoi is less inclined to
enter into negotiation now than it was in
early 1965. Bombing seems to have the same
effect on Asians that it had on Anglo-Saxons;
by making the victims angry, it stiffens. their
determination and unifies the national will.
The Secretary admits as much when he states
that we can never bomb "the other side" to
its knees.
Having knocked down the two major sup-
ports for the bombing, the Secretary does as-
sert that it is serving the third purpose: to
make the war more costly and painful for
the North Vietnamese. As an example, he
produces the now classic figure of five hun-
dred thousand North Vietnamese compelled
to leave civilian occupations in order to re-
pair bomb-torn roads, railroads, and so on.
The bombing is costly (and to both sides).
But, simply as a matter of logical analysis,
this statement is meaningless unless one can
show that the increased cost hampers North
Vietnam's ability to make war, either imme-
diately or over a long period. Every indica-
tion is that it doesn't. North Vietnam is basi-
cally a rural country, with only a few fac-
tories, many of which are now gone. An agri-
cultural economy cannot be destroyed from
the air. The increased Soviet aid alone since
early 1965 is four or five times the estimated
bombing damage. And food received from the
various allies of North. Vietnam more than
makes up for any loss in production caused
by the diversion of those five hundred thou-
sand workers. A good case could be made for
the contention that, except in terms of hu-
man life, North Vietnam is showing a profit.
Even the most militant among us have failed
to produce evidence of food shortages or oth-
er economic distress in the North. If every
time your rent was raised your pay was in-
creased even more, living would be more
costly, but it would be hard to claim that a
worsening financial situation required you to.
leave your home.
Almost every expert, military or non-
military, who is not personally involved in
conducting the war has come up with the
same analysis. Included are Generals Ridg-
way and Gavin, former Marine Command-
ant Shoup, and a large group of the country's
most distinguished scientists who spent
months studying the problem. For this logic
new to be publicly adopted by the Secretary
of Defense is a remarkable acknowledgment
of its accuracy, since he favored the bombing
initially and has supported nearly every
step in its escalation-at least, until recently.
Both the available recollections of insiders
and the public record point to Secretary
McNamara as one of the three men who
must share the principal responsibility for
transforming a political and economic con-
Riot first into a military struggle and then
into an American war. The others, of course,
are Secretary Rusk and President Johnson.
Now the Secretary of Defense, by indirection,
has told the careful reader that, even put-
ting moral considerations aside, the bombing
is not worth its enormous cost in men and
planes, its alienation of our allies, the in-
credulity or disgust it has aroused through.
out the world, or its undeniable diminution
of chances for a negotiated settlement. The
bombing is militarily ineffective. It is un-
fortunate that McNamara, having just of-
fered a powerful argument for not bombing
any targets whatever, did not come out and
say so but, instead, chose to assert that we
should not bomb many more targets. How-
ever, in days when no distinction is made be-
tween fact and rhetoric, and both are being
constantly reshaped to meet the political
and propaganda needs of the moment, even
a little bit of intellectual honesty about the
war, mired though it may be in the familiar,
deceptive confusion, still manages to shine
with-an u. xpected, heartening light.
MR. McNAMARA FACES BOTH WAYS
Mr. FULBRIGHT. Mr. President, I also
ask unanimous consent to have printed in
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 S13538
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CONGRESSIONAL RECORD - SENATE September 25, 1967
the RECORD as a part of my remarks the
lead. editorial in the St. Louis Post-Dis-
patch of September 20, 1967, entitled
"Mr. McNamara Faces Both Ways."
There being no objection, the editorial
was ordered to be printed In the RECORD,
as follows:
MR. MCNAMARA FACES BOTH WAYS
Secretary McNamara at San Francisco Mon-
day made an eloquent and powerful appeal
for "rational discussion and decision making"
on nuclear strategy-and concluded with the
announcement of a decision which seems
anything but rational.
The decision is to proceed with production
and deployment of a "light" anti-ballistic
missile defense intended primarily to pro-
tect us against China. Mr. McNamara had
argued vigorously against the decision only a
few months ago. In our view he falls short
of giving adequate rational grounds for it
now.
To much of his speech, one of the most im-
portant he has made, no exception can be
taken. With measured and irrefutable argu-
ments he destroys any case for building a
"heavy" ABM system designed to protect us
against Russian nuclear power. Our protec-
tion, he says, lies in our offensive missile
superiority, which is now on the order of
three or four to one, and which assures us
for the foreseeable future of the power to
wipe out any enemy or combination of ene-
mies even after absorbing a surprise attack.
Building a "heavy" ABM system, Mr. Mc-
Namara persuasively argues, would not pro-
vide an impenetrable shield. What it would
provide is an incentive for the Soviets to mul-
tiply their own offensive forces, thus trigger-
ing "a senseless upward spiral of nuclear
arms." At the end of this new stage in the
arms race, both sides would be essentially
where they were before. After wasting vast
resources, each would still lack the power
to wipe out the other with a first strike, but
each would still possess the power to destroy
the other in a retaliatory second strike..
Surely he is right in concluding that in these
circumstances what the world needs is not a
new race of nuclear arms, but "a new race
towards reasonableness."
Yet it is hard to agree that he and the Ad-
ministration are racing towards reasonable-
ness by deciding to build, if not a "heavy"
ABM system against Russia, a "light" ABM
system against China. The decision seems to
be dictated not by reason but by, political
and military pressures. Mr. McNamara's ef-
fort to justify it simply does not carry con-
viction.
The Secretary says China may have a
"modest nuclear force by the mid-70s, and
a small ABM system would enable us to deter
China from using it for "nuclear blackmail"
in Asia. But ABMs on American soil are not
going to protect Formosa or Vietnam or India
from Chinese missiles. As Mr. McNamara him-
self cogently argues with respect to Russia,
the real protection, the real deterrent, lies
not in ABMs of questionable effectiveness but
in our power to destroy an enemy in retalia-
tion for a nuclear attack anywhere.
Mr. McNamara argues also that a "light"
ABM system would incidentally strengthen
defense of our missile bases against Soviet
attack, but since he has previously argued
that a "heavy" system would not strengthen
those defenses enough, this must be con-
sidered a weak rationalization. He says there
would be some degree of protection of our
population against an accidental missile
launch somewhere in the world; but the
only way to gain any population protection
of meaningful proportions would be to sur-
round every city with ABMs, and this he
does not propose to do.
Mr. McNamara is quite right in warning
that we must guard against pressures to ex-
pand his "light" system into the "heavy" one
which, as he says, would accelerate the "mad
momentum" of the nuclear arms race. But
where he hopes to have relieved those pres-
sures we fear he has only encouraged them.
Already militarist Congressmen are proclaim-
ing his decision as but the first step, the
foot in the door. At the next stage we expect
to hear them proclaiming how absurd it is to
build a little ABM defense against a minor
nuclear power like China when what is
needed is an enormous ABM defense against
Russia. Having yielded a little, Mr. McNamara
will find it very hard not to yield more.
The Secretary, far more than many others,
has faced up to the awful realities of the
nuclear age, and grasped the folly of endless
escalation of overkill capacity. But he does
not follow the logic of his own conclusions.
Just as in Vietnam he marshals an over-
powering case against the effectiveness of
bombing the North, yet presides over the
bombing and each stage of its escalation, so
in this case he destroys any rational grounds
for building an ABM system light or heavy,
and yet winds up building one. What are, we
wonder, his basic principles?
A SLUR ON INTER-AMERICAN BANK
Mr. FULBRIGHT. Mr. President, I ap-
prove of the editorial published in the
New York Times of September 23 re-
garding the Inter-American Develop-
ment Bank, and ask unanimous consent
to have it printed in the RECORD as a
part of my remarks.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
A SLUR ON INTER-AMERICAN BANK
The Inter-American Bank is one of the
pioneering Institutions in development fi-
nance. Congress has recognized the com-
mendable job it has done for the Alliance
for Progress by continuing to approve sizable
contributions to its operations. But the de-
mand of the United States Congress that the
bank be subjected to a special audit may well
be interpreted as a slur on its dedicated staff
'and on the programs it has. sponsored in
Latin America.
It is doubtful that Congress intended to
cast aspersions on this estimable institu-
tion or to inflame its Latin-American mem-
bers. But, as It did in denying Britain the
right to bid on construction of some Navy
minesweepers, Congress through such petty
actions is jeopardizing this country's friends.
Indeed, there is a real danger that Latin-
American contributors will retaliate by also
demanding expensive audits of their own.
It would not be surprising if other foreign
countries sought to examine the books of
the International Development Association,
the new Asian Development Bank and other
international financial institutions. Such of-
fensive tactics could only embitter relations
between cooperating countries and make it
impossible to keep the high quality per-
sonnel now at work.
The Inter-American Bank and other in-
stitutions borrowing funds in the market
place already undergo scrupulous independ-
ent audits. Moreover, they are under the
general supervision of the national represent-
atives who sit on their boards. So there
is no reason for the United States or any
other country to insist on further superfluous
inspections. It is too late to reconsider this
measure now, but it will hardly win friends
and influence for the United States In Latin
America.
Mr. FULBRIGHT. Mr. President, I do
believe, however, that it would be a serv-
ice to the public to be told the full story,
which is that the Senate deleted the
Belden amendment requiring the audit;
that the administration did not object;
that the House rejected the conference
report, which did not include this
amendment. The House vote was about
2 to 1 in rejecting the conference re-
port.
In short, the Senate did 'all that it
reasonably could to prevent this slur
upon the Inter-American Bank man-
agement, but was overridden by the
House of Representatives with the tacit
support of the administration.
MUST AMERICAN BOYS CONTINUE
TO DIE TO KEEP SAIGON PO-
LICE STATE IN POWER?
Mr. GRUENING. Mr. President, the
leading editorial of the Washington Post
this morning is entitled "Retrogression
in Saigon.". In it, the comment is made
that the recent midnight raid and sub-
sequent arrest and detention of former
Finance Minister Thanh for 18 hours
"did not quite jibe with that glowing
firsthand report of the President's spe-
cial commission gave us of democracy
burgeoning bravely in a war-torn land."
There has been no retrogression in
Saigon.
The Government of South Vietnam
was a police state before the rigged elec-
tions of September 3, 1967.
The rigged elections changed nothing.
Many of us pointed that out here on the
floor on August 11, 1967.
The stage was set well before Sep-
tember 3 with the props all in place-
the strictly controlled press, the care-
ful screening of candidates, with the
complete elimination from participation
of popular candidates who posed too
great a threat to the military junta-
the eligible electorate screened with equal
care-duplicate ballots given to the mil-
itary. Then the curtain was drawn and
the President's commission was permitted
to watch where, and when only to the
extent permitted by the military junta.
The surprise of the Washington Post
that with such careful rigging of the elec-
tion in South Vietnam "instant democ-
racy" did not result from the Septem-
ber 3 elections is really what. is sur-
prising.
What else could be expected?
It is to be hoped that the Washington
Post will call its editorial to the attention
of some of its columnists who seem to
be living in a "never-never" land, ob-
livious to the facts of life.
The Washington Post expresseses the
hope that the Government in Saigon
"continue to try to advance, rather than
retard, some measure of political re-
form." It warns that without such re-
forms, "the generals should be on notice
that our war effort may suffer, in turn,
from an erosion of popular support at
home."
I agree with that warning but must
point out that all signs indicate that the
tide of that eroison grows stronger daily.
The question may well be asked: "Must
American boys continue to die for that
Saigon gang?"
Well, I am asking it. More than 13,000
have already been killed in combat, and
100,000' wounded, many of them crippled
for life-blinded, armless, legless, para-
lyzed. It is positively disgraceful that we
continue to pretend we are instilling
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