CONGRESSIONAL RECORD--SENATE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000500410007-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 9, 2016
• Document Release Date: September 2, 2001
• Sequence Number: 7
• Publication Date: August 13, 1974
• Content Type: OPEN

kugust 13, 1
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CONGRESSIONAL RECORD ? SENATE
about 15 percent versus an average of about
19 percent, in the ether industrialized pa-
tions?and we, have also had a much slower
rate of productivity advance. The need ,for
emphasizing capital formation should be
clear.
In addition, however, there are important
new investment requirements that go be-
yond the normal needs to replace and ex-
pand the existing stock of productive capi-
tal. There are many of these new investment
requirements, including pollution control,
new systems of urban transportation, and
energy. The latter is the most important
by far. Project Independence is estimated to
take from three-quarters to one trillion dol-
lars of new investment over the next decade
or so. In recent years energy has accounted
for about one-fifth of total investment; in
the foreseeable future, however, that propor-
tion will have to rise to about one-third.
It is clear, therefore, that our future needs
for saving and investment represent an enor-
mous challenge above and beyond what Is
normal for the American economy. Indeed,
Investment will have to take a rising share
of economic output at the expense of con-
sumption and government spending.
To do this, we will have to make several
Important changes in our policies. First,,
Government spending will have to be curbed
to make economic room for the added in,"
vestment, Second, profits will have to grow
to provide both the incentive and the where-
withal for inveStment. We cannot look upon
profits as an unnecessary evil, as I fe t so
many Americans now do. We must void
legislation and regulation that is puni ve of
profits honestly earned. If we do not, apitai
formation will be inhibited and the al pur-
chasing power of workers' earnings ill grow
I/10113 slowly.
'Third, we must reverse our lo held pol-
icies that penalize saving and encourage
consumption. Our tax system s uld be re-
examined to this end, Federal It erve Regu-
lation Q, which limits interest aid on sav-
ings accounts, should be re ised at the
earliest opportunity. And we ? ould permit
the normal incentives of th price system
to operate freely. We must ? ,t impose ern-
ficial government constraint as for example
we have done for so man years, and are
still doing, in regulating th price of natural
gas.
It is instructive to, reca what took place
after August 1971, whe we removed the
artificial constraint ed exchange rates
that had produced an ? ervalued dollar for
So many years. In the ft e market, the dollar
moved to new, more c repetitive levels and
our trade balance,, whi had been in a nose
dive for many years returned to surplus.
Similarly, when we changed agricultural
policy 180 degrees t permit maximum pro-
duction, American rmers responded to the
incentives of the ket place by planting
large amounts of dditional acreage, which
are now produ ng record harvests, the
prospect ,of whic has brought grain prices
down. These ar just two examples of what
the market p e, given reasonable freedom
and time, can chieve in overcoming serious
economic pro ? ems.
OLD-5E RELIGION
Another f ndamental part of the fight
against Mil tion is what has come to be
called "tha old-time religion," the essence
of which i sufficient monetary and fiscal re-
straint to keep the demands for economic
output wi in our capacity to meet them. In-
deed, if are to squeeze out the high rate of
inflation that is now thoroughly embedded
in our s stem, we will have to operate with a
margin f slack in the economy.
- 'Fins ? oes not mean that economic policy
shatild ?e harsh and brutal. Not at all. A re-
cestiO would not help the cause of price
stabil y?quite the contrary, because a re-
cessi.,. would force us back into strongly
stimulative policies that in the end would
create still more inflation. ,Frequent and
abrupt changes in economipf policy are al-
most as disastrous as no reitraint at all,
Still, that old-time religion has its costs.
We will have to tate some unpleasant-tast-
ing medicine, and we will have to continue to
take it for several years or longer. We will
have to give up some government spending
programs, ant unless growth in Federal
spending can /se cut back appreciably we will
have to for the pleasures of a tax cut.
Credit will ave to be less easily available.
Business p ofits cannot grow quite so buoy-
antly. 17 mployment will have to average
slightly igher than it otherwise would.
These /are not negligible costs. But if we
are to gain control over inflation, there is
no at er way. The costs of continued rapid
inflation, which is the only alternative, are
far eater.
A d that brings us back to politics again.
I said at the outset of this talk that my big-
gest worry was whether the American people
and their Government would have the sus-
tained political will for this fight. I think
there is more hope now than ever before.
,the double-digit inflation of this past year
has frightened many people, and made them
more willing to support tough anti-inflation
policies. Good economics is getting to be
good politics.
But my question has not been answered
yet. We do not know if the people and their
elected representatives want to attack the
root causes of inflation, rather than just the
results of inflation. We do not know if they
will face up to the costs of anti-inflation
policies. We do not know if they will assess
these costs?as I do?as being much smaller
than the costs of continued rapid inflation.
If we can persuade them of this, then we will
have gone a long way toward achieving the
important goal of electing an inflation-proof
Congress in 1974.
LAW OF THE SEA CONFERENCE
Mr. MUSKIE. Mr. President, between
August 4-7, I attended the third United
Nations Law of the Sea Conference, being
held in Caracas, Venezuela. As an ad-
visor to the U.S. delegation, along with
the Senator from Rhode Island (Mr.
PELL) and the Senator from Alaska (Mr.
STEVENS), I had the opportunity to dis-
cuss oceans issues with our negotiating
team, including Ambassador Stevenson;
Ambassador Shirley Amerasinghe of Sri
Lanka, president of the conference; sev-
eral leaders of foreign delegations; and
representatives of the U.S. fishing indus-
try. I was greatly impressed by the far-
reaching significance of the 100-item
conference agenda and the seriousness
and diligence with which most delega-
tions are carrying out their responsibili-
ties. I want to take this opportunity to
share with my colleagues some observa-
tions about the proceedings of the 'con-
ference.
The 149 nations represented in Cara-
cas are involved In a most complex but
crucial undertaking: they are trying to
draft a comprehensive treaty governing
the use and conservation of the world's
ocean resources. It would be a mistake to
understimate the difficulties fazing the
negotiators at the conference, the largest
international gathering ever convened.
Each of the states represented?coastal,
landlocked, developed, developing, mari-
time, nonmaritime--has its own inter-
ests, its own set of priorities, and its own
short- and long-term policy goals. And
toaf
S 14761
these countries are not merely talking
about existing law and how to perfect it.
Rather, they have set for themselves the
objective of discarding settled law and
developing a comprehensive new regime
for the oceans.
The formal work of the conference is
being done in three working groups. Of
these, I was especially interested in the
progress of committee II, the group con-
cerned with the protection of coastal fish
stocks and other issues related to coastal
State jurisdiction.
I came away from the conference con-
vinced that the United States must adopt
a unilateral 200-mile fisheries limit with-
out delay.
In a speech last month before a ple-
nary session of the conference, Ambas-
sador Stevenson announced a major
change in America's position concerning
the territorial sea and the establishment
of a 200-mile economic zone. Stevenson
said:
We are prepared to accept, and indeed we
would welcome general agreement on a 12-
mile outer limit for the territorial sea and a
200-mile outer limit for the economic zone
provided it is part of an acceptable compre-
henseive package, including a satisfactory
regime within and beyond the economic zone
and provision for unimpeded transit of states
used for international navigation.
This decision on the part of the United
States to support the establishment of a
200-mile economic zone is long overdue
and vital to the protection of this coun-
try's offshore fishing and mineral re-
sources. For too long the United States
has passively stood by while foreign ves-
sels have virtually depleted our coastal
fisheries stocks. Our experience in the
Northwest Atlantic is illustrative of the
gravity and immediacy of the situation.
From 1952 through 1960, the U.S. fish
catch from New England waters aver-
aged about 700 million pounds a year, or
99 percent of the total catch from that
area. In the early 1960's, the Russians.
the Poles, the Germans and other for-
eign fleets moved into these waters in
large numbers. By 1969, the Soviet fleet
was taking 836 million pounds, or 50
percent of the total catch from New Eng-
land waters; while the U.S. catch had
declined to about 418 million pounds, or
about 25 percent of the area's total har-
vest. In the last couple of years, the total
U.S. catch has declined even from this
level, for neither bilateral agreements nor
regional organizations like ICNAF have
been effective in protecting legitimate
U.S. fishing interests.
Unfortunately, the majority of the na-
tions represented in Caracas do not seem
to share a sense of urgency about the
need to establish without delay a 200-
mile economic zone to manage and con-
serve the world's fisheries resources. Time
and time again in discussions with for-
eign diplomats concerning the work of
committee II, I heard it said that "we
need time to build new international
law." Surely, time is needed for ideas to
mature concerning certain issues?such
as what transit rights vessels will have
In other countries' territorial sea, in the
proposed economic zone and in straits;
what rules will apply to islands and arch-
ipelagos; what rights of access and con-
servation rules will apply to distant water
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S 14762 ONGR E,mu
fishing within coastal State con :relied manic jurisdiction. And the prospects ap- surface. There is considerable cautions
econcimic zone' And I remain convinced pear good fOr compromise concerning the optimism that they can succeed. I fully
that an enforceable international agree- extent of control that the proposed Sea- support their efforts. In fact, the sooner
silent on the use of the seas is the best hA, A,itht,ritv will be able to exercise the better.
Way in the long-run to stop the
over-
fishing which threatens to ruin our fish-
eries resources.
But if we are to preserve many of our
effshore fish stocks--haddock, herring,
eleekerel, yellowtail flounder, hake, half-
do not think we can afford to wait
tirtil the Law of the Sea Conference pro-
'tames a treaty. In my talks in Caracas,
I found many foreigii delegates: optimis-
tic that there will be agreement on the
coastal zone jurisdiction issue by next
year and that the General .Asserrilly goal
of a treaty by 19'75 will be met. I am not
so sure. After 5 years of preparatory
work, the conference is still bogged down
in preliminary matters, About 60 of the
149 nations are still trying to develop
their own national positions on a variety
of oceans issues, while many of the others
hold widely divergent points of view. And
in regard to conserving our fisheries re-
sources, if we wait 2 or 3 years for an
international treaty to be coneluded,
there may not be any resources left to
protect. Adopting an interim 200-mile
limit, on the other hand, will provide
immediate protection for all our offshore
fish stocks and will signal the nations
of the world that the United States is
not prepared to stand by idly while the
conference negotiations drag on.
So I have returned from Caracas more
resolved than ever to push for immediate
legislative action on S. 1988. the bill
which has been approved by the Com-
merce Committee by a 14 to 2 vote and
which would establish on an interim
basis a 200-mile fisheries limit. This leg-
islation is very close to the U.S. ,position
enunciated by , Ambassador Stevenson
last month in Caracas. Both provide for:
First, management of coastal species by
the coastal State; second, management of
ana,dromous species such as salmon by
the nation in whose rivers they spawn:
and third, management of migratory
species such as tuna by international
commissions. But, Mr. President, S. 1988
recognizes the urgency of the situation
and mandates interim unilateral action
to regulate and conserve the marine re-
sources in our 200-mile offshore waters.
While there has been little perceptible
forward movement concerning. coastal
State jurisdiction issues, I was most en-
couraged by the progress of committee , paesing the coast if the port State per-
theI
working group responsible for the sistently fails to enforce.
seabed beyond national jurisdiction, that While in Caracas, I discussed the three
is, negotiating the regime under which Proposals with various foreign delegates.
deep sea mining will take place. Here, the I also voiced my view to the U.S. dele-
discussion is focusing on the question oe gation that no Law of the Sea Treaty
who may exploit the high seas area should prevent this country from apply-
Some natioas, led by the United States, Use its present domestic laws and from
d enforcing standards
over the commercial development of the Mr. President, Ins& unanimous con-
international seabed. sent to have printed in the RECORD the
Committee III. the other 'working following articles concerning the Third
prone of the conference. is responsible U.N. Law of the Sea Conference.
for pollution and scientific research. There being no objection, the articles
While four sources of pollution are being were ordered to be printed in the leacolue
discussed?vessel source, land-based as follows:
source, economic _zone pollution, and he- :Prom the New York Time, Aug. 3, 39741
ternational seabed pollution--it is ap- PROGRESS SLOW AT SEA LAW PARLEY; MAN r
parent that vessel source pollution is by SPEAK PRIVATELY OF SrAtEMATE
far the most controversial environmental (By Leslie H. Gelb)
issue. Under the present system, the CARACAS, VENEZUELA, Aug. 2.?The Parque
United Nations Intergovernmental Mari- Central, a complex of futuristic-looking sky-
time Consultative Organization (IMCO) scrapers designed for totally self-contained
promotes the drafting of conventions living, has been inhabited since late June by
about 4,000 people whose almost total daily
with standards, and flag states enforce
standards. States have a right to coencnertnneis the sea thatlies seven miles be-
thosey n They
are
mountainsnelega teathattrnitng Caracas.
adopt higher standards, and to enforce United Nations
standards in areas under their "jurisdic- law of the seas conference, officials of inter-
tion." although it is not exactly clear national organizations and representatives
what the term "jurisdiction" compre- of various economic interests and of a nuni-
1aends. At present, it is thought to include ber of liberation movements.
the port area and the territorial sea. The The purpose of the conference is to come
up by Aug. 29 with some kid of coherent. if
basic problem is that the 1973 IMCO tentative, agreement on navigation fishing
Convention on Pollution from Ships con- and sea mining, a partial pact that Will haVe.
tains very weak standards and flag states the effect of restraining netions from mak-
simply do not enforce them. Under U.S, lag individual laws on the sea. Then, next
legislation?the Ports and Waterways spring, the delegates will meet in Vienna to
Safety Act and the Federal Water Pollu- turn that agreement Into a treaty. Their
tiori Control Act?the Coast Guard ts progress here is painfully blow; many speak
empowered to establish standards higher privately of stalemate.
than those in the convention and to en- ORIGINAL GOAL
force those standards in our navigable The original goal of the Caracas meeting
waters. was to produce a draft constitution for all
Three alternatives are being discussed nations. That treaty, it was hoped, would
establish new territorial limits and zones of
at the conference: First. A maritime control for marine resources beyond the ter-
state proposal, supported by the United
. ritoria1 limits, and provide some kind of in-
Kingdom and France, under which only ternatiohal eattlaority over eN.ploitation of the
11VICO would adopt standards and only deep seabeds,
the flag State would enforce; "We're moving but slowee," said John R.
Second. A coastal State proposal, stevenson, the head of the United States
supported by Canada and Australia, un- delegation.
der which coastal States would have the ?it's critical to meet the General Assem-
bly goal of a treaty before the end of 19757
right subject to safeguards to promulgate
and enforce higher national standards saidne)ereMr. Stevenson's deputy, John Norton
for their 200-mile economic zone: But while everyone here puts a good face
Third. A proposal, supported by the on what is going on when speaking for the
Tinted States, under which a State could record, unofficially the participants in this
promulgate and. enforce higher stand- third United Nations conference on the law
anis with respect to vessels that Visit its of the seas since 1958 talk of stalemate.
ports. In addition, the U.S. proposal The votes are there, says an American
would allow coastal States to take action delegate, but the means for setting up a
strong international authority for the deep
in emergency situations to prevent im- seabeds are not. The private and national
minent pollution, and after going interests represented here seem as various
through a variety of cumbersome p,ro- and complex as the animal and plant hie of
cedures, to enforce against the vessels the sea itself. There are nations with coasts,
landlocked nations, powerful nations and
underdeveloped nations? all with special
axes to grind.
148 COUNTRIES
In the main ,ponference hall, a theater that
has been converted to look like the General
Assembly hall in New 'fork. hundreds of
men and women, represeni,ing 148 countries,
met daily. They are the core of the confer-
favor granting licenses to private Par- establishingence, the experts: most of them have been
Lies sponsored by States. Other coun- higher than those adopted by IMCO in working on law of the sea for most of their
tries, including most of the world's less both ports and our territorial sea with mature lives.
developed nations, would prefer to see respect to coastwise and foreign coin- Andres Aguilar of Venezielti, a veteran (li-
the establishment of an international merce. plomat in matters involvine the sea, presides
Seabed Authority able to engage in min- In conclusion, I returned from Caracas over these meetings from a podium 10 feet
big itself. No explicit agreement has yet with a feeling that the Law of the Sea high, set atop a stage, towering over the dele-
gates. In the rear of the great room sits Louis
been reached in committee I. Yet, a con- negotiators have taken on an enormous B, Sohn of Harvard University,?who has been
sensus appears to be developing about and extremely important task. For they occupied with sea law for 15 years. Toward
;he need for an international regime to have undertaken to establish a new inter- the middle of the room are Joseph Warioha
regulate the exploration and exploitation national regime governing the resources of Tanzania, a lawyer who am been working
of the seabed beyond coastal State eco- contained in 70 percent of the Earth's on the subjecl; Dye years, Alvaro de Soto. a
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cUNGRESSIONAL RECORD ? SENATE
young Peruvian diplomat whose entire career
IS devoted to,Op search for .a coherent law
of thetia., ,
Their experience and expertise are typical
of most Others here, as is their zeal; they
meet from early morning to late evening, and
they confer While at meals.
? What drives these men and women la a
concern that without a new law fa/ the seas.,
? nations will assert more and more separate
claims on fishing, on sea mining and on navi-
gation, leading to International anarchy, new
tensions and new conflicts.
The president of the conference, Hamilton
Shirley Amerasinghe of Sri Lanka, likes to
refer to the hoped-for document as a state-
ment of agreement, whose language would
be couched in actual treaty form, a docu-
ment that would fall somewhere between a
draft treaty and a declaration of principles.
One problem, a European diplomat says, is
that such a statement "cannot be hammered
out by voting; that would tear this confer-
ence apart. If a delegation feels its national
interests are being outvoted," he went on, "it
might sinaply pick up and leave. This must
be done by consensus." ,
GEOGRAPHY A FACTOR
"Tell me the exact geo,graphical situation
of a nation." an American delegate said,
"and I will tell you its exact negotiating posi-
tion at this conference."
The United States, which has teamed up
on some lasues with other maritime nations
such as the ,Soviet Union and Japan is mak-
ing proposals along the following lines:
A 12-mile territorial limit as long as there
is no interference with passage over and
under straits. "Territorial seas" no vary
from 3 miles to as many as 200.
Beyond the 12 miles, an 188-mile economic
zone, each nation having exclusive rights
there to submarine resources?many such
projected zones are rich in oil and natural
gas?but not to fish or navigation. Fisheries
would operate under the principle of full
utilization, international arbiter a would step
In when a "host" nation was not taking a
certain amount of fish from the area to
determine whether other nations might use
it.
Establishment of SA international agen-
cy that would issue licenses to nations or
corporations to mine deep seabeds. The
oceans are known to contain vast stores of
ma,gancise nodules, from which nickel and
copper can be deriveil. But only a few nations
have the technological ability to do the
mining.
insrxrr Teams
Unity at the conference among about 77
less developed nations varies from issue to
issue. Some Latin-American states such as
Peru and Ecuador simply want a 200-mile
limit. But most of them., the delegates say,
lo'ok' for a 12-Mlle "territorial sea" with con-
trol over straits and an economic zone of
about 200 miles, with exclusive rights to all
reSolarces, but not control over navigation,
and full international ownership and con-
trol of the deep seabeds.
. Still another group of about 40 nations,
many of them land-locked, want to share in
the resources of both the economic zone and
the deep seabeds. Then there is a cluster of
States like Norway and Australia that want
fullOOntrol to the limits of their continen-
tal ahelveS.
The voting procedure calls for each article
to be carried by two-thirds of those present
and voting, as long as that is a majority of all
148 nations represented here. But in each
nation's proposal, agreement on any one
Ware is tied to agreement on all other isSirea.
Tble, as Jens Evenson? the head of the
Norwegian delegation? sees it, means a queer
land of juggling, in which all the balls must
be In the air at the same time, long enough
for all to see that their Interests are being
accommodated.
And no nation represented here will mak
a fundamental concession until the others dc)
As an American delegate put it, "How can
we wire Washington asking to make cam
promises when no one else around here IS
making any compromises?"
From the New York Times, Aug. 4, 19741
PROTECTING THE ECONOMY OF 200 MILES OF
OCEAN
(By Evan Luard)
LorwoN.?Discussion at the Caracas con-
ference on the Law of the Sea is increasingly
focusing on the proposal for a 200-mile eco-
nomic zone: that is, an area off the shores of
a coastal state, within which it could exercise
total control of economic resources, both
those within the waters (mainly fish), and
beneath them (mainly oil and gas). Already
many countries, including both the rich (the
Soviet Union, Britain, Australia and others)
and the poor (China, most African and
Latin-American states), have indicated at
least qualified support for the idea.
The proposal for a general economic zone
emerged about two years ago among African
and Latin-American countries. It was pro-
duced as a compromise, modifying the more
extreme claims of some of the Latin-Amer-
ican states to a 200-mile territorial sea in
which the coastal state would exercise full
jurisdiction for all purposes. Recognizing
that this was unacceptable to many mari-
time countries as a threat to free naviga-
tion, and conscious that economic rights in
the zone were what mattered most to them,
these countries proposed a zone in which the
coastal state would enjoy economic rights
only. The idea has since received support
from a substantial number of the 149 na-
tions attending the Caracas conference. Since
most of the world's nations are coastal states
and have an obvious interest in acquiring
extended economic rights of this kind, it will
scarcely be surprising if the proposal eventu-
ally wins majority support.
Even under the existing laws, many dis-
putes have arisen about the dividing line
between the seabed zones of neighboring
states (between Greece and Turkey in the
Aegean Sea, between Britain and France In
the area south of Ireland, and between China,
Japan and Taiwan in the China Sea). Such
disputes will obviously become more fre-
quent if a wider zone is accepted. '
What would be the economic implications
of an. economic zone? Many of the most val-
uable resources of the oceans, both Ash and
minerals are found relatively close to the
shore. Thus, if generally accepted, the pro-
pose' would mean that these resources would
be appropriated by the coastal states, espe-
cially those with long coast lines such as the
United States, Canada, Brazil, South Africa
and Australia, many of them already wealthy
countries.
The United States has nonetheless not so
far supported this concept. Washington orig-
inally proposed a,more complex scheme under
which there wou tn be three economic zones:
One would stretch to the 200-meter depth
line and would be fully under the control of
the coastal state. Another would be a wider
trusteeship zone, where the coastal state
eculd control exploitation but would share
the royalties with the international commu-
nity. The third would cover the deeper areas,
such as those containing the huge deposits
of ferromanganese nodules that could be-
come a prime source of copper and nickel,
where exploitation would be fully under in-
ternational control.
One reason the United States preferred
such a solution was that it seemed more
likely to preserve freedom of navigation in all
areas beyond the 200-meter line, a matter
of concern to the United States Navy and to
S 14763
American shipping generally. The scheme,
which covered seabed exploitation only,
would also have allowed American fishing
fleets continuing rights even within areas
Within the so-called "trusteeship zone" of
Other countries.
United States fishing fleets have for years
been in conflict with the governments of
Ecuador and Peru, which have from time to
time arrested vessels fishing within the
waters they claim. The acceptance of a 200-
mile economic zone would put those govern-
ments in the right and prevent action by the
United States Government in support of
those fishermen in such cases.
It may be that eventually there will be
some kind of compromise between the "trust-
eeship zone" ideas.
For example, the United States might ac-
cept a limit of 200 miles for the zone of
? economic jurisdiction, but demand that
there should be, as in its own proposals, some
sharing of revenues from the zone with the
international community. This would help to
meet the concern of the 60 or 70 states that
are either land-locked or shelf-locked (that
Is, their continental shelf immediately abuts
that of other states), who would otherwise be
unable to benefit from the most valuable
areas of the ocean. Without this, such states
could only benefit from the international
system, which, it is generally agreed, would
operate in the outer areas. There an interna-
tional authority will take the royalties from
exploitation and distribute them to all states
with special consideration for poorer coun-
tries. The larger the zone taken by coastal
states, therefore, the less the proportion of
the resources and revenues that would be
available to the international regime. A sys-
tem by which some part of the revenues in
the 200-mile zone, perhaps from the outer
half of it, went to the international system
would thus represent a fair balance of inter-
est between the coastal states and the non-
coastal, or partially coastal, states.
The question of rights to seabed resources
is not the only question to come up at Cara-
cas. There has been much discussion on the
questions of the breadth of territorial sea,
the area fully under the jurisdiction of the
coastal state. It is now clear that a majority
of states would accept a 12-mile zone. In
the case of most maritime countries, how-
ever, including the United States, this
would be only on condition that there was
some guarantee of free navigation for naval
as well as merchant vessels through the
many international straits that would, as a
result, come entirely within territorial
waters. A number of the states that control
such straits, such as Malaysia and Indonesia,
have declined to give this assurance and
there may be prolonged disagreement on this
point.
[From the Washington Post, July 30, 1974]
THE LAW OF THE SEAS
A pattern of international law, replacing a
patchwork, is being laid upon the world's
oceans for the first time?at the Law of the
Sea Conference in Caracas. The developing
consensus would extend the territorial sea
of coastal states to 12 miles; establish an
"economic zone" out to 200 miles in which
coastal states would, with certain exceptions,
control fishing and mining; and create an in-
ternational program or "regime" outside the
200-mile line to mine the deep seabed as the
"common heritage" of mankind. Sharp dis-
agreements still exist among the 149 partici-
pants at Caracas and there is no assurance
that the full text of a treaty will be reached
In this summer's session. But it is clear that
the old system?or non-system?of rights and
responsibilities which has prevailed on the
high seas is gone.
The very concept of "high seas," open
equally to all, is buckling as particular na-
tions asset sovereignty or special rights
over areas further and further from their
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and as the international coneutinity
collectively asserts certain kinds of author-
y over areas further out. If a country hold-
ing an offshore island can claim a 200-mile
economic zone around it, for instance, then
lie whole of the Mediterranean and Carib-
eau Seas and about half the Pacific Ocean
aecome subject to national claims. To make
es deep seabed a "common heritage," more-
over, is to Impose new controls there as well.
ihese would reduce the existing freedom of
erivate or national entrepreneurs in order
ea spread the expected mineral benefits to
'-,t,.tes not in a position to exploit them
t tiernselves.
This drive to write new rules for the sea
results from the worlds growing hunger for
the sea's resources, from the increasing soph-
istication of the technology with which to
exploit these resources, and from the grow-
mg likelihood that nations striving fat them
will take arms if law' is not first applied
UnturprisinglY, it is those nations enth long
coastlines plentiful resources near their
coasts (both in the water and under the
?seabed) and advanced technology which are
in the strongest position to get what they
want from the high seas. More than any other
country, the United States has all three. Hue
this does not mean it can go it alone.
With it great navy and its global political
role, the United States needs the right of
continued, politically uncluttered transit
through the various international straits
wind% would fall within one or another
state's territorial waters under a 12-mile
territorial-sea rule. This is a major goal for
the American negotiators at Caracas.
Fishing is a knotty problem. Japanese and
Russian "distant-water" fleets have grossly
overfished haddock and salmon etoeks, for
example, off the American coast. Bat tyr14
United States has been reluctant to invoke
200-milaecenunnic zone beciaute its own tuna
and shrimp fleets fish within 200 miles of
other nations' shores. Washington it row
ready to accept the 200-mile Content bue it
wishes to keep some fisheries open to its tuna
and shrimp fleets and, most important, to
ensure that effective conservation and re-
source management measures are adopted
all around,
As to a deep-seabed international regime to
extract minerals for the "common heritage"
the United States would have the new au-
thority to simply license the exploiters lend
distribute the licensing revenues. But tee
Chinese, seeking a Third World leadership
role, would arm the authority with the power
to do the exploiting itself.
American fishing, gas and oil, mining and
maritime operators naturally hate a strong
commercial interest in ariy new international
rules of the sea, just as the U.S.. government
has a strong diplomatic and military inter-
est. These interests, complex and soinetimes
contradictory, are all reflected in the Amer-
ican proposals at Caracas. Some mining and
Itching groups have persuaded Congress
to
draft legislation that would, if enacted, pre-
empt international decisions on c rueial is-
sues. Wisely, Congress has not acted on this
legislation, The United States as much as
any nation, needs the cooperation of 'others
an the high seas. It can hardly expect to get
such cooperation--indeed, its exa mple will
only breed conflict?If it acts alone.
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CONGRESSIONAL RECORD -- SENATEgas,' 13, 1971-
tocks has prompted legislation, such as
Senator Matierusoer's bill, S. 1988, to ad-
dress the problem on an interim basia
by declaring a .200-mile resource zone.
Meanwhile, Mr. President, the eco-
nomic gone concept has emerged as the
preeminent and pivotal issue before the
Caracas conference and until an agree-
ment is reached, debate on other policies
will not proceed expeditiously.
Ambassador Stevenson has also
stressed passage of military vessels and
aircraft through and over international
straits as an issue of major concern. Not
only unimpeded transit but nondiscre-
tionary transit is essential to insure un-
restricted passage in terms of ship type--
submarine, supertanker, nuclear pow-
ered?and destination of cargo.
Currently however, debate on these
urgent issues has not produced the sub-
stantive results anticipated. The licens-
ing aspect of the seabed question has
stalemated in committee 1. Committee 2.
discussing the economic zone, may com-
plete this session with only a comparative
table, not significantly different from
the Seabed Committee's report avail-
able at the beginning of the conference.
Scientific research, handled in committee
3, may not only be subjected to regula-
tion inside national jurisdiction, but out-
side as well.
Ambassador Stevenson has expressed
several misgivings concerning the pres-
ent 'dim of disc'ussiOns. Canada, Chile.
Iceland, India, Indonesia, Mauritius,
Mexico, New Zealand, and Norway have
proposed that articles be drafted as a
framework for discussion of archipelagic
state's rightS, territorial sea, economic
zones and the continental staff. Ambas-
sador Stevenson, however, holds that
these proposed articles are too general
for use as negotiable items.
High seas freedom, particularly ger-
mane to the question of passage through
international straits, has not been clearly
preserved in proposals under considera-
tion, according to Ambassador Stevenson.
In. addition, the Ambassador expressed
reservations concerning the lack of com-
pulsory dispute settlement provisions and
absence of state duties insuring conser-
vation and full utilization of fish stocks.
Freedom of the seas has been funda-
mental to international law since the
Dutch jurist Grothis established the
principle in 1609. That principle however,
derived from Grotius" view of a limitless
expanse which "can be neither seized nor
enclosed," is not viable in a world of dis-
parate interests seeking to exploit the
ocean wealth. The major issues of re-
sources, rights, and responsibilities im-
mediately concern the nations of the
world, and the Law of the Sea Conference
is seeking to update ocean law to accom-
modate current and fin are world needs.
Substantive progress in this direction.
however, does not seem readily forth-
coming. While the final Law of the Sea
Treaty should receive our close attention
and hopefully provide a step forward in
an international approach to global
needs, the self-interests of the United
States in vital issues of ocean policy must
not be ignored in our efforts to achieve
international agreement..
Mr. President, in order to provide a
complete report for my colleagues on the
Tfal need to reach a balance which enables 5;
us to exploit the riches of the sea while pre-
serving the interest; of all ... We muet try to
ensure that the new law of the sea will en-
dure as the foundation of man's uses of the
sea.
Mr. President,. 1: would like to report to
my colleagues on progress to date at the
conference which will draw to a close on
August 29 after a 10-week session.
Ambassador John R, Stevenson, Spe-
cial Representative of the President, has
headed the U.S. delegation with John
Norton Moore serving as Deputy Special
Representative. Included in the Ameri-
can delegation are 13 alternates, 16 Sen-
ators and Members of the House, 6 ed-
ucators, 10 congressienal staff members,
20 official advisers and a group of ex-
perts on petroleum, hard minerals, in-
ternational law, marine environment,
fisheries, marine science and maritime
industries.
The opening days of the conference
were primarily devoted to organization
and procedure. The conference general
committee designated three committees
to handle issues under consideration:
Committee 1?seabed regime; commit-
tee 2?economic zone and all other agen-
da items not assigned to committees 1
and 3; and committee 3--pollution and
research. The plenary session was as-
signed topics of peaceful uses' Of the
ocean and universal participation in the
Law of the Sea Treaty. All committees
have considered first, regional isxrange-
merits; second, responsibility and liabil-
ity for damage to the marine environ-
ment; third, Settlement; of disputes; and
fourth, peaceful uses of the ocean.
The conference established complex
rules of procedure whereby a gentle-
men's agreement rather than a vote has
bead predominantly operative. Rules
Permit deferment of voting on substan-
tive matters until all possible efforts at
compromise have been used.
General debate, which began on June
28, has addressed a range of issues: ter-
ritorial seas, transit through interna-
tional straits, Protection of the marine
environment, compulsory settlement of
disputes and creation of an international
regime for nondiscriminatory licensing
and exploration of the deep seabed.
Particular attention has been focused
on consideration of a 200-mile economic
zone owing to substantial fisheries inter-
est here in the United States. The eco-
nomic zone being discussed in Caracas
would extend coastal State control of ma-
rise mineral resources within' and
beneath adjacent waters, while guaran-
teeing freedom of navigation and allow-
ing foreign fleets certain rights to fish
within coastal waters. While supporting
this 200-mile economic zone, the U.S.
delegation has called for compulsory
third party settlement of disputes. This
has elicited obiection from several Coun-
tries and is now being debated.
The 200-mile coastal State control
would replace tae traditional 3-mile limit
established in the 17th century and sub-
,sequent delineation or a contiguous 12-
in le resource zone established in more
t recent years. Present depletion of various
epecies of fish coupled with inadequate
s and ineffective international agreements
to conserve and manage threatened fish
THE INTERNATIONAL LAW OF THE
SEA CONFERENCE
Mr. HOLLINGS. Mr. President, toe
Third International Law of the Sea Con-
ference has been underway this ,summer
in Caracas, Venezuela, to midst? ocean
law, essentially unchanged in 250 years
United Nations Secretary General Km
Waldheini delivered an Openir g speech
which underscored the purpose of thi
conference--
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4 CONGRESSIONAL RECORD ? SENATE S 14765
Caracas Conference, the Subcommittee "some of the powers that don't have any ex- The White House press spokesman
on Minerals, Materials, and Fuels, chaired cuse have less than a sense Of urgency." made the following statement on behalf
by Senator LEL AtETCALF, Democrat of "I think a treaty is imperative," Mtufkie
affirmed, "I don't believe that unilateral of President Ford just before the vote:
Montana, and the National Ocean Policy action is the solution." The Government and people of the United
Study will participate in a hearing Sep- lie conceded, however, that the American States welcome the agreement reached in
tember 17 to receive a report from the fishing industry does not think anything win principle on August 9 between the Portu-
U.S. delegation to the Law of the Sea come out of the conference and regards uni- guese government and representatives of
Conference. Senator 1VIercal.r, who will lateral action by Congress as the only Guinea-Bissau. We extend our congratula-
chair the hearing, is the Interior Corn- solution.
August 13, 197
mittee representative on the National
Ocean Policy Study.
Specific issues to be discussed during
the hearing will include the proposed
200-mile limit, deep seabed mining, pas-
sage of vessels through straits, ocean pol-
lution and other subjects under debate at
the conference.
Senator Murcur is the author of S.
1134, the proposed Deep Seabed Hard
Minerals Act, which would authorize
Federal licenses to companies desiring
to engage in mining for manganese nod-
Ules on the floor of the ocean well beyond
present jurisdictional limits of the
United States.
?The National Ocean Policy Study joint
hearing, subject to later change, is
scheduled to be held at 10 a.m., Septem-
ber 17, in room 3110, Dirksen Senate
Office Building.
LAW OF THE SEA CONFERENCE
Mr. HOLLINGS, Mr. President, last
week, three of our colleagues, the Sena-
tor from 1VIRine (Mr. Muslim) , the Sena-
tor from Rhode Island (Mr, PELL) , and
the Senator from Alaska (Mr. STEVENS)
attended the third U.N. Law of the Sea
Conference, held in Caracas, Venezuela.
In their discussions with our negotiating
team, as well as with foreign delegates,
all three Senators stressed the need for
speedy conclusion of a treaty to protect
fish stocks off the coasts of the United
States.
Mr. President, I ask unanimous consent
that an article from the Caracas Daily
Journal describing the Senators' discus-
sions at the conference be printed in the
RECORD.
There being no objection, the article
was ordered to be printed in the RECORD,
as follows:
[Prom the Caracas Daily Journal, Aug. 7,
1974]
U.S. SENATORS STRESS NEED TO PROTECT
NATIONAL FISHING
Concerned over the sluggishness of the
proceedings at the Third U.N. Conference on
the Law of the Sea, Senators Edmund Mus-
Me of Maine and Ted Stevens of Alaska
yesterday stressed the need for a treaty pro-
tecting national fishing waters.
' Both Benators favor the establishment of
S 200-mile economic zone protecting vast
U.S. fishing interests operating off both the
Atlantic and Pacific coasts, but expressed dis-
tions to the leaders of both governments.
Stevens, who concurred with Muskie's We look forward to a productive and
bleak assessment of the chances for a friendly relationship with Guinea-Bissau.
treaty, supported unilateral Congressional I have instructed our representatives at the
action imposing an "interim" 200-mile eco- United Nations to support the application
nomic zone to protect the American fishing of Guinea-Bissau for membership in the
industry while the treaty is being hammered United Nations.
out.
According to Stevens, stocks of Alaskan
pollack, halibut, and salmon have been
severely reduced by Russian and Japanese
fleets fishing within 200 miles of the North
American coast.
Stevens insisted that the imposition of a
200 miles zone will force Japanese fishermen
to abide by the tough Alaskan marine con-
servation laws, something which he claims
they have so far ignored.
The Japanese, he charged, do not observe
seasonal bans imposed on American fisher-
men in the case of salmon, they do not ob-
serve the practice of harvesting only part of
a particular run, and therefore threaten
the obliteration of the species; they use
trawling gear "which literally vacuums the
bottom of the sea, and they fish for salmon
on the high seas, which he considers a dan-
gerous practice.
Stevens reasoned that if the United States
had a 200 mile preferential economic zone,
the U.S. could demand that the Japanese
abide by Alaskan conservation standards be-
fore granting them access.
If the zone is established unilaterally rath-
er than by treaty the United -States would
have to enforce the limit, something which
Stevens contended could be done. "We are
very sincere about it," he said. "We can
enforce it."
For Stevens, Japanese salmon fishing on
the high seas presents one of the most
serious threats to the American salmon in-
dustry.
Stevens explained that salmon make runs
from the rivers where they were hatched to
the high seas and they intermingle with
salmon from other hatching areas. When
they are ready to lay eggs they return to the
hatching place of their origin in fresh water.
If the salmon are fished on the high seas,
as the Japanese are doing, Stevens said the
danger exists that entire communities of the
fish will be obliterated since several runs
of salmon often swim together and cannot
be distinguished from one another.
If, however, the salmon are caught as they
return from their hatching grounds in in-
dividual runs, part of a run will be spared
so that the first may propagate. Destroying
entire communities of the fish in the high
seas may place the entire species in jeopardy.
Stevens contended that even though the
Japanese do much of their high seas salmon
fishing beyond the 200 mile limit, the vast
majority of their entire fish catch is made
within the zone.
Americans can be proud of our partici-
pation in this momentous decision by the
Security Council. About 90 countries had
already recognized the Government of
Guinea-Bissau at the time of the vote.
Portgual herself had announced that
she would recognize the new republic's
independence soon and had supported its
admission to the United Nations. It was
clearly appropriate that Guinea-Bissau's
right to official membership in the com-
munity of nations be recognized at this
time.
In welcoming this significant step in
the decolonization of Portuguese Africa,
we must pay tribute to the courage, the
patience, the good will, and the states-
manship of the new Government of both
Portugal and Guinea-Bissau. Both sides
have shown great patience in nego-
tiating differences, a willingness to take
all the time necessary to work out a
settlement that will be fully satisfactory
to all. In the negotiations, it is apparent
that both sides have worked for an agree-
ment that would have the solid support
of all the people of both countries and
that would leave no wounds on either
side. In Guinea-Bissau itself, judging by
reports we have seen over the past week
soldiers on both sides have used the nego-
tiating period not to try to improve their
military positions but to work together in
preparation for independence. Portu-
guese soldiers have received assistance
from liberation movement fighters. The
elected Government of Guinea-Bissau
has been encouraged to organize polit-
ically in the areas that were previously
controled by the Portuguese.
While the problems of achieving a just
and secure independence for Mozam-
bique and Angola are much greater than
for Guinea-Bissau, it is clear that nego-
tiations on the future of these territories
are proceeding in the same spirit of
good will, patience, and respect for the
interests of all involved. There is no
doubt, with overwhelming world support
for this 'evolution toward independence,
that these two countries will soon join
Guinea-Bissau as members of the
The Senator argued that access to the
y over e lack of progress at the Law of United Nations.
the Sea Conference here. zone could be used to pressure the Japanese
"We've got groups, people, human beings to ban high seas salmon fishing. I hope that the United States is giv -
The salmon runs which have been de- ing its full support to the process now
whose ability to live have been put in jeop-
aro by depletion of fishing stocks princi- pleted so far, Stevens said, can be replenished, underway that will enable these terri-
saying ouch!" but only if action is taken immediately, tories to finally take their rightful place
pally by two countries," said Muskie. "We are
Nruskle, in Caracas "to get a flavor of the
Conference," said. that riot only do the pro-
ceedings seem to be slower than expected, but
-that there also exists the disturbing pos-
sibility that a treaty may not be produced at
all.
Noting that the participating countries
have had about five years to prepare for the
conference here, Muskie contended that
among the independent nations of Africa
Our Government should be in constant
U.N. MEMBERSHIP FOR GUINEA- contact with all the participants in these
BISSAU negotiations and with various groups in
Mr. HUMPHREY. Mr. President, the ? Portugal and the territories. We should
U.N. Security Council yesterday recom- make clear to them our support for their
mended unanimously that Guinea-Bissau efforts to achieve an independence settle-
be admitted as the 138th member state ment that is fair to everyone and offer
of the United Nations, our assistance in overcoming any ob-
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S 14766 CONGRESSIONAL RECORD ? SENATE Augwt 13, 1974'
stades that might emerge. We shotlei vindicated those'who expected that he might MOny supporting restricteve procedure'
support Illi. efforts to assure that mi- become, attar the coup, a "Porlanguese de for White House access to tax returns.
Gaulle," a leader with the vision and stature
noeitY rights are respected in this memo; the Administration has censistently loin
to Indus* his country to cut old lasses and
and that the independent governments bled against the Senate amendment, de-
seek new gains. The whole international
have the full support of all their people, community has an interest in encouraging crying its possible interference with nor-
Finally, we should begin evaluating the like the
both countries in the West which, mal Federal agency procedures, and also
assistance needs of these territories in ididB'tcatr, are friends and allies azpriccimnolvallnegdgietsoawnbuses, legislation to remedy
building a strong economic and political of Portugal, a er countries which pro-
base for independence and make Clear claim themselves ' the champions of anti- 3: do not believe these arguments
our intention to join with other nations eolenialism? against the Senate arnenement are valid
to help meet these needs. The United Nations deserves special note, or convincing. Nevertheless, in the con-Thein-
Secretary General, acting at the behest
Mr. President, I ask unanimous of the General Assembly, has played a can_ terest of accommodating objections of
sent that a Washington Post editorial of tral part hi facilitating talks between the the House and the adtninietration against
August 12, entitled "The End of Poral- former antagonists in Lisbon and Africa. the Senate tax return amendment, I will
gars Empire," be printed in the RECORD. This has surely helped ease what was bound offer a modified amendment which nar-
'Mere being no objection, the editorial to be a difficult transition in the best of cir- rows the restriction on access to tax re-
was ordered to be printed in the RECC an, curnstances. The United Nations' more diffi- turns to White House Office staff,
cult tasks, however, remain. It must help
as follows: rather than the entire m ecutive branch.
THE END OF PORTUGAL'S E1APLRE
stimulate the nationalists in Mozambique
and Angola to had a referendum, or it must The modified amendmeet reads as fol-
with courage and style, Portugal is cutting provide another mechanism to assure that lows:
the knot of its African empire. Barely 100 the people of those territories have some S. 113. Limitation upon sccees of White
days after the coup which removed EUTO'le'S choice in approving the government that House Office personnel to tax re-
hardiest dictatorship, the new government wilt rule over them. The United Nations must
led by former colonial General Antonio de turns.
also try to secure some guarantees for the Notwithstanding any other provision of
Spinola has declared itself ready te transfer European and Asian Minorities. If the proc- law or any regulation made pursuant there-
power "to the populations of the overeats ess of decolonization in Portuguese Africa to, no return within the meaning of 26
provinces who are recognized to be qualift ed." starts to turn sour, as it yet could, the world U.S.C. 6103(a), including any information
There is some ambiguity in these nords, but body will then have to face the question of of any kind appearing on such a return,
there is also much responsibility. Lisbon's how to fulfill the international will over the shall be open to inspection by, or disclosed
concern Is net merely to let doter the 11Th" opposition of some of the parties involved, to any officer or employee in the White House
manse burden which Its eolonies of 600 But the more salccesSful its mediation now, Office, other than the President personally
years have become, but to do 130 ra a way the less likely that it will have to cross that upon written request made to the Secretary
that leaves the new nations-to-be as well bridge. of Treasury or his delegate.
prepared as possible to cope on their own. It
_._.........--__
Is heartening that President Spinola's offer . ... This modification should reasonably
to transfer power is being received by Afri- RESTRICTENCr WHITE HOUSE STAFF
can nationalists as an offer made in good ACCESS To TAX RETUE,N8 Preclude any questions of its germane-
ness to a White House Office Personnel
faith,
It Is no surprise 'that GuLnea-Tlissan, on Mr. WEECEZER. Mr. President. on Au- bill which, among other sections, au-
west Africa's bulge, Is to be the first of the gust 7 ,the Senate tabled the confer thorizes additional White House em-
' colonies toreceive full independence and en- report on the White House office per- Ployees who "shall perform such official
duties as the President may prescribe."
'ter the United Nations. The forces of the lib- sound l bill by a vote a 54-34, for the
eratton movement there had already reduced
POrtaglieSS control to a few enclaves. The
reason that a Senate amendment re- I submit that this modified amend-
stricting executive branch access to tax merit would achieve an important and
colony had become an economic liability to
returns, approved duly 18, had been de- necessary reform aimed at questionable
Lisbon. An elected government Ls already
running the liberated zones. More than 80 leted in conference. On August 8, Chair- practices uncovered in recent Senate in-
states have recognized an independent man McGEE called for a new conference vestigations. I know of no compelling
Guinea-Bissau. The government of LUIS Cab- on the bill and Senate conferees were rationale for White House aides to have
ral claims but does not control the offshore appointed with instructions to insist on access to any tax return.; or the informa-
islands, Including Cape Verde?B. strategi- the Senate amendment. tion contained therein. Should the Presi-
eally situated archipelago whose political fu.-
Nevertheless, the House on Monday, dent require tax return information to
tare remains tel). negotiated. August 12, acted in effect to send back fulfill his official duties, he may make a
In lienzezehique, in east Africa, Liebon has personal request in writing for such
the in-
pledged to start negotiations withthe original conference report without
nr material from the IRS.
cipal rebel group, Prelimo. An -undeclared the critical amendment relative to t
ax
oea,se-fire is largely in place, thanks to the returns. This parliamentary maneuver In tabling the conference report last
Portuguese army's reluctanee to fight on and by the House returned the same legis- week, the Senate stood firm in support
Prelimo's good sense in accepting accom- lation in order to circumvent the new of reform necessary to restore the in-
modation. Several hundred thousand whites conference duly called for by the Senate. tegrity of our Government.
live in Mozambique; the families of Borne By concurring in Senate amendments With the House playing parliamen-
have been there hundreds Of years. As Pr(- to H R 14715 but deleting the tax re- tary games and the administration waf-
ress toward independence is being made, , ? ?
Lisbon is understandably eager to care for lcara section, the House is clearly ques- fling on needed reform., let the Senate
their legitimate interests. Any sign o toning the Senate's resolve in twice up- now reaffirm its commit ment to the fun-
tuguese support for the white secessionist holding a reform to strengthen the rights liamental principles of constitutional
movement which is budding in Mozambique of the individual Under the Constitution. democracy.
could, of course, backfire badly I urge my colleagues in the Senate to Let us now for the third time in as
,,Angola, on the white coast of the conti- send a message to the House that we will many weeks, express our support for
nent, is at once the largest, most populous not play parliamentary games with the restricting White House tampering with
and richest Portugrese colony; the one where confidentiality of every American's tax confidential tax returns.
the Portuguese exercise the most control and return. ?
where the rebels are the most spilt among
When the so-called "House amend-
themselves. It Is also the one harboririg the FOOD, NATURE, AND TECHNOLOGY
most serions possibility of a black secession- ment" comes to floor later this week, I
let effort?Cabinde, a small territory with intend to move to concur in the House Mr. KENNEDY. Mr. President, one of
high promise of a great deal of offshore oil, language with an amendment restoring the most pressing problems which all na-
This will be the meet difficult colony to de- the Senate's provision tightening access tions must confront together during the
colonize. The government in Lisbon. has TO tax returns. years ahead is the grim prospect of acute
made a start by opening contacts with An- In opposing the Senate amendment, international hunger. More and more na-
golan rebels. The House conferees raised questions of tions are succumbing to a common mal-
Preeident Spinelli has aptly called Lisbon's the germaneness of the Senate amend- ady of severe food shortages as the ex-
decoke:even decision a "victor3r ova' our-
selves." His government till faces difficult
merit, arid indicated that the Ways and plosion of world papule lion and devestat-
S
tests at home. Not all Portuguese are as per- Means Committee was studying possible ing natural disaster swell food demand
ceptive as he in seeing the necessity of join- legislation in this area. And, in spite of and this soaring need for food only serves
ins the modern age. He has, however quite the IRS Commissioner's public testi- to drain what little toed reserves existed
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CONGRESSIONAL RECORD SEN
these services, they receive no share of
the royaliies. This is in direct conflict
with Iong-eStablished revenue iharing
procedures in effect 'for royalties received
in ckrinection with Mineral exploration
and production fr
lands.
Mr. President, it is
fair sitUation correc
tinental Shelf oil and gas
Crease dramatically in t
years as this country strive
self-sufficient in energy pro
the States off whose shores this
takes place are to provide govern
services essential to the people an
dustries engaged in the work, they m
? have a share of the revenue derived fro
it.
An editorial printed in the Anchorage
Daily Times On June 12 discusses this
Issue in detail, especially as it relates to
Impending expansion of offshore oil and
gas production in the Gulf of Alaska.
I urge the Congress to recognize the
urgency of this matter and to act as
quickly as possible to complete work on
S. 2389.
.; ask unanimous consent that the An-,
chorage Daily Times editorial? of June
12, 1974, be printed in the RECORD follow-
ing my remarks.
There being no objection, the editorial
was ordered tO be printed in the RECORD,
as follows:
_SHARING OFFSHORE DOLLARS
As interest Mounts in federal offshore leas-
ing of petroleum tracts in the Gulf of Alaska,
pressure also should increase on the Congress
to correct an obvious flaw in the way reve-
nues from such leases are handled.
Unfortunately, the desire for a summer
recess plus the embroilment in the Water-
gate affair threaten to give a low congres-
sional priority to what Sen. Ted Stevens,
Gov. William A. Egan and many others have
cited as an urgent problem facing all states
where offshore drilling activity is either in
progress or contemplated.
The problem is simple to explain.
All money accrued from petroleum or
mineral leases on offshore public lands?be
it in the form of bonuses royalties or leasing
fees?goes directly into the federal treasury.
None goes to the adjacent states which must
support the offshore activity through in-
creased public services for schools, police
protection, park and recreational expansions,
sewers and all the other attendant needs of
population booms.
This is in direct contrast to what happens
to revenues derived from onshore drilling
activities on public lands. The discrimina-
tion is substantial. The solution to it is not
the elimination of revenue-sharing by states
affected by onshore; drilling, but rather by
extension of the concept to offshore revenues.
As things now stand, the Mineral Leasing
Act of 1920 grants states 37.5 per cent of
revenues from, public lands within their
borders in compensation for their support of
public facilities. To use a term now current
In Alaska, the money offsets the "impact" of
exploration and production activity. Alaska
already benefits greatly from this onshore
assistance.
But unless there is a change in the law,
the vast impact of offshore operations in the
Gulf of Alaska will hit the state?and
coastal communities which become support
centers for the operations?with a severe
blow.
Gov. Egan has called repeatedly for an
amendment of the federal law to correct this
situation, Sen. Stevens, another strong ad-
on-shore public
h time this un-
Outer Con-
sing will in-
next few
become
tion. If
asing
ntal
n-
vocate of granting the states a share of off-
shore operations, is the sponsor of one of
four bills dealing with this situation now
pending in the Senate.
George W. Healy Jr., retired editor of the
New Orleans Times-Picayune and a leading
national spokesman on the subject, has
pointed out how this discrimination has hit
home in his state:
". . . rt costs the State of Louisiana con-
siderably more to provide governmental serv-
ices for people whose work is involved in
operations three miles beyond our coast than
the state receives in taxes as a result of these
operations. We collect no severance tax on
oil and gas produced three miles off our
coast, although the severance tax is the
mainstay of Louisiana education financing.
We do not collect even sales tax on goods and
materials used or consumed on the offshore
rigs."
This same situation will develop in Alaska
ess the law is changed.
OUGHTS ABOUT FIGHTING
INFLATION
Mr. ?LE. Mr. President, with infla-
tion clea the leading concern of the
American ople today, many cures and
remedies ha been suggested.
Curiously, e would contend that
the way to fig inflation is to increase
Federal spendin ? d expand many Gov-
ernment program *put I believe the ma-
jority of our people" re thoroughly con-
vinced that this ye outflow of Uncle
Sam's capital is the r cause of the in-
flation problem.
I agree with this view :11.. believe that
the elimination of ? ssary and
wasteful Federal spending long with
a balanced budget?is the way a
sound and stable economic c te can
be achieved.
I was interested, therefore, the
June 10 comment of the Salina, s.
Journal. In an editorial entitled "
for Inflation" the Journal set forth s
exal sound ideas about the necessity
a strong "home base" in our domestic
economy which I believe are shared by
millions of Americans today. These
thoughts merit widespread consideration
in the Senate as work on the appropria-
tions bills for the coming fiscal year ap-
proaches, and I ask unanimous consent
that this editorial be printed in the
RECORD.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
OGRE FOE INFLATION
Inflation and interest rates are greater
national problems today than Watergate.
They can lead to an economy wrecking blow-
up.
Congress can do something about them.
Here's how:
Two of the inflationary federal programs
are foreign aid and military procurement. In
some ways, they are tied together.
Both spend money the U.S. Treasury does
not have. That creates debt and rubber dol-
lars. The Treasury must borrow at higher and
higher interest rates. That boosts inflation
and bank rates.
Although some of this spending comes
back in the form of wages and profits to
American labor and industry, little that it
produces is useful. Not much is made that
we can wear, eat? drink, drive or fiddle. Too
much is designed to go boom.
The wages and profits step up consumer
demand but do not increase the goods that
S 10699
consumers want. Excess of demand over sup-
ply is a classic cause of inflation.
To the extent that it produces only paper
work, any governmental spending is infla-
tionary. But foreign aid and military spend-
ing are special and excessive examples.
But isn't national security involved?
Shouldn't we be able to blow up the Rus-
sians faster than they blow us up? Shouldn't
we fulfill those secret commitments to the
crooks in South Vietnam?
On the contrary, if our role as a super-
power and sugar daddy to the world is to
result in bankruptcy and bread riots at
home, is it worth the price?
Furthermore, we can undo all our do-
goodism by leading the world into depres-
sion. It already is heading there and our own
inflation is one cause.
If Congress cut out at least part of this
spending, shrunk the appropriations for aid
and for airplanes that don't fly, ships that
don't float and generals that don't fight, what
more could it do? More than reducing the
federal debt?
Among our greatest shortages are those in
energy and housing.
Some of the billions. saved could be turned
to low-interest loans for home construction
and utility improvements. Ample precedent
and methodology exist for both type of loans.
Why bail out the public utilities? To
meet increasing energy demands they must
make capital expansions financed today
at an enormous cost. Publicly regulated,
they can and do secure approval of rates
that pass these excessive finance charges on
to the consumer. Low interest loans to utili-
ties could cut consumer bills.
Stimulation of housing and utility devel-
opment also would tend to compensate for
any reduction in employment caused by a
shutdown in military hardware. Skills re-
quired to make turbines and guns are not
dissimilar.
Turning swords into plowshares may not
appeal to a Pentagon-fed Congress. Re-
duction of aid may not fit Mr. Nixon's dreams
of world power.
However, the prime essential of any mili-
tary or diplomatic program is a strong home
base. And our home base now is grievously
threatened.
If these notions make sense, tell Jim Pear-
son, Bob Dole and Keith Sebelius. -
THE LOCKHEED-TEXTRON
REFINANCING PLAN
M CRANSTON. Mr. President, I
would ke to call my colleagues' atten-
tion to matter which might have es-
caped th notice in the press.
-For ma months, rumors have circu-
lated that kheed Aircraft Corp. was
once again 1 erious financial difficulty
and would soo ome to the Government
for another ba t. Apparently that will
not be the case. n June 3, Lockheed
announced a tent ye plan to refinance
its long-term deb The plan would
bring $100 million of w equity to Lock-
heed, financed largel y the purchase
of 12 million new co on shares of
Lockheed by Textron, In
On the surface, it 1 to me as
though the plan would brin needed new
capital to Lockheed job ecurity to
thousands of employees at Lo eed and
its major suppliers and subco tractors,
and perhaps an end to the nee or the
Government's $250 million loan ? ran-
tee, in effect since 1971.
The plan is subject to the approva of
Lockheed's banks and other creditors
and the shareholders and directors of
both Lockheed and Textron. If these
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CONGRESSIONAL RECORD --- SENATE
groups find after careful study that the
plan is as advantageous for all con-
cerned as it seems to me on the basis of
a superflaal reviev., I trust they will
approve it.
Mr. President, I ask unanimous con-
sent that the pres3 release issued by
Lockheed Corp. to explain the arrange-
meat, be printed in the RECORD.
There being no obJection, the press re-
lease was ordered to be Printed in the
RECORD, as follows:
LOCKHEED, TEXTRON DIRECTORS APPROVE TEN-
TATIVE PLAN FOR REE TRTICTURING LOCKHEED
DEBT
BURBANK, Ceara., June 3?Daniel J. Haugh-
ton, Chairman of the Board of Lockheed Air-
craft Corporation, and G. William Miller,
Chairman of the Board of Textron Inc., joint-
ly announced today that their respect ve
Boards of Directors have approved a tenta-
tive plan which would include an equity in-
vestment by Textron in Lockheed and a re-
structuring of Lockheed's debt. Mx. Miller
Indicated that Textron has held talks con-
cerning the plan with Lazard Freres Is Co.,
Lockheed's financial advisor, and also with
some of the Lockheed lending banks.
The plan contemplates a new equity in-
vestment in Lockheed of $100 million, of
which Textron Would provide $85 million by
acquiring 12 million new common shares of
Lockheed at $s per share and ,$25 million of a
new Lockheed preferred stock. The remain-
ing $15 million would be provided by a rights
offering of 3 million new Lockheed commen
shares to Lockheed shareholders at $5 per
share to be 'underwritten by Lazard. After
the purchase of 12 milion shares of Lock-
heed common stock, Textron would OA
about 45% of the approximately 26.4 m
lion Lockheed commen shares then o
standing.
It will be a condition of the plan th the
Lockheed lending banks convert $27 mil-
lion of the present $620 million L kheed
bank debt into the new Lockheed eferred
stock, and confirm a bank credit 3 Lock-
heed of $375 million.
In addition to the Infusion of w equil,y,
the plan would result In a signant reduc-
tion of Lockheed's debt serv e costs and
would improve cash flow d tn
eral years.
Under the plan, Locahee
as a as
sparebte corporation
of the: ew financial al-1PP
lending banks, Textron holders. The stock of
Textron would be hel
there would not be
tion of the two co
tions would not be
Except for Mr.
and chief exeeuti
the premosed rec
which time Mr.
chairman, no
merit of Loc
Miller will co
executive ofil
Text *on I
tal assets
of $1.9 b
of $100
One 0
Is to gi
TriStal'
gram.
the
the
he next sev-
ould continue
ith the benefit
provided by the
d Lockheed share-
kheed acquired by
for investment, and
Merger or cousolida-
asales. Textron opera-
ated in any way.
ler becoming chairman
officer of Lockheed after
italization is finalized, at
aughton. will become vice
er changes in the manage-
ed are contemplated. Mr
inue as chairman and chief
of Textron.
diversified company with to-
.3 billion, and with 1973 sales
n and net income after taxes
.5
he primary purposes of the plan
additional support to Lockheed's
1011 commercial air tramp ert pro-
he TriStar is an important part of
fleet of many major airlines around
rld. In order for the plan to become
etre
ive, It would be a condition that stif-
fie
t, airline second buy options he con-
ed into firm orders, or new orders be
ained, to bring the TriStar program to
total ot 180 Arm production contunitinentse
eluding the '74 airplanes already delivered,
s. Cumulative orders to date total 202, indul-
t lug 135 firm orders and 67 second buy op-
times. It is contemplated that the TriStar
program will run to at least 300 aircraft over
its entire lifetime, extending well into the
next decade.
Under the proposed plan Lockheed would
und,ertake to adopt a change in accounting
policy by writing off certain non- eeurring
costs related to the TriStar p ?. These
non-recurring costs have alrea been ex-
pended and are currently be amortized
by Lockheeed. over the, plann 300 airplane
program. It is estimated at under the
amended accounting poli , the write-off
which would , be charged ? Lockheed's in-
come in 1974 as a cond on to and before
the plan becomes itilec would amount to
approximately $300 on net after pro-
viding for the antici d related tax bene-
fits. It is anticipate that in future years
the TriStar progra Would operate near a
breakeven after al barges. With continua-
tion of Locichee other substantial and
profitable progra is, this would permit Lock-
heed to return o greater profitability.
Lockheed's .erations include Lockheed
Missiles and pace, located in Sunnyvale,
California, ich produces fleet submarine
ballistic m' es such as the Poseidon, satel-
lite space e:hicles and other research and
developm t projects; Lockheed-California,
with pla a in Burbank and Palmdale, which
in addi ?n to producing the 'TriStar L-1011,
design Rnd manufactures military aircraft
Such the P-3C Orion and the S-3A Viking;
Lock eed-Georgia, located in Marietta, which
des a and builds large military and corn-
m' ial airlift and cargo aircraft such as the
C 30 Hercules; Lockheed Aircraft Service,
th headquarters in Ontario, California,
"inch is the nation's oldest and largest air-
craft maintenance and Modification firm with
operating branches around the world; and a
number of other divisions.
The plan is intended to assure availability
of sufficient capital so that these Lockheed
operations will not be restricted by lack of
adequate financial resources. Many Lockheed
programs are essential to national security
and represent some of the most advanced
technology in the world.
The suggested plan Contemplates release,
on terms satisfactory to the parties, of the
U.S. Government loan guarantee for Lock-
heed which was approved by Congress in 1971.
The proposed support from private banks and
private industry should assure continued
vitality of Lockheed as a unique and vital
American enterprise.
With the restructuring of debt, it is ex-
pected that Lockheed would 'be able to gen-
erate sufficient cash over the next few years
to make substantial reduction in its senior
securities and maintain itself on a sound
financial basal,
The preliminary plan, if accepted and im-
plemented, would be subject to approval by
Lockheed's banks and other creditors and by
Lockheed and Textron directors and share-
holders. It would also be subject to several
other conditions, including agreement by
Rolls-Royce as engine supplier to continue
its support of the TriStar L-1011 program,
and approval of various U.S. Government
agencies.
It is expected that closing would occur by
ISO November 1974.
THE CARACAS LAW OF THE SEA
CONFERENCE
Mr, FANNIN. Mr. President, on the
20th of June this year, representatives
of more than a hundred nations will
gather in Caracas, Venezuela, under the
auspices of the United Nations for a Law
of the Sea Conference. One of the most
Important items of the agenda will be
the formulation of guidelines clearing
the way for exploitation of the mineral
,1 ul le 17, 19 74.
resources of the deep seabed before we
are faced with a mineral crisis as serious
as the energy crisis now upon us. The
nature of the mineral problem, the ex-
tent of the deep sea resources available
with our present advanced technology,
the salient points of the very fair Amer-
ican position at Caracas and the alterna-
tives open to us are set forth with great
clarity in a carefully researched article
entitled "The Worlcrs Greatest Strip
Mine" which appears in the February
Issue of the Navy League's Sea Power
magazine. I cannot overemphasize the
Importance of the subject dealt with in
this article which I would like to share
with my colleagues and with readers of
the CONGRESSIONAL RECORD. Mr. Presi-
dent, I ask unanimous consent that
aforementioned article are printed in the
RECORD.
There being no objection, the article
was ordered to be printed in the RECORD,
as follows:
THE WORLD'S GREATEST Bran, MINE?A TRIL-
L CON-TON GOLCONDA OP LAND-SCARCE
METALS IN THE DEPTHS OF THE SEA
(By Merle Macbain)
Merele Macbain is a retired Navy com-
mander and a former public affairs officer
on the staff of the Oceanographer of the
Navy.
"rhe real extent of our dependence on
mineral resources places iii jeopardy not
merely our affluence but world civilization."
This is the Milling conclusion of the au-
thors of a new and definitive asessment of
American mineral resources commisiohed by
the U.S. Geological Survey. The 722-page re-
port--which bears the challenging title
"Professional Paper 820"?has received only
passing mention in the daily press, however.
The subject had better not be dropped
there, and if seine of the bolder American
mining tycoons have their way it won't. But
the most likely solution to a same part of the
"mineral crisis" poses some etaggering prob-
lems, the least of which are technical.
Some of the relevant facts are undisputed.
The United States, rapidly becoming if not
already a have not nation, Is now importing,
in whole or in part, 69 of the 72 raw ma-
terials vital to the present high American
standard of civilization.. This is on the au-
thority of Helen Deitch Bentley, the salty
and indefatigable chariman of the Federal
Maritime Commission, who points out that
virtually all raw materials imported must
come in by ship.
Four of the most essential of Mrs. Bent-
ley's list of 69 vital raw material imports are
manganese, nickel, copper and cobalt, and
for various reasons deserve special attention.
Manganese?the fifth most widely used
metal in the world. This ferroalloy serves as
a scavenger in extracting impurities in the
manufacture of steel and in sum alloys with
steel to make it durable and tough. When
a nation can do without steel it can do with-
out manganese. But the United States, which
definitely cannot do without steel, produces
no, repeat no, manganese of metallurgical
quality. In 1970, the latest year for which
Department of Interior figures are available
for all four metals cited, the United States
imported, at a cost of $66 million, 85.7 per
cent of all the grades of manganese it con-
sumed.
Nickel?a necessary alloy en the production
of stainless steel Large amounts are required
for a variety of high temperature and elec-
trical resistance alloys and smaller amounts
for such items as coins and nickel cadmium
batteries. In 1970 the United States imported
100 per cent of its high-grade nickel con-
sumption, mostly from Canada, at a cost of
$426.5 million.
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CONGRESSIONAL RECORD ?SENATE S 107Q
Copper?second only to iron in the amount
and vazipty of its uSes. The United States
produces the vast
bulk of fts re4u1,,reinerkts. The problem here
is the approaching exhaustion of high grade
U.S'. ores. In 1070 the 'United States imported
6 per cent of its Primary consumption, at a
cost of $71
04.)balt--most important for the manufac-
ture of permanent magnets. Without it there
wain& be no modern communications sys-
tems. /t is also used in guided missiles, jet
aircraft engines, gas turbines and high speed
tool steels. Cobalt ores, for which no substi-
tute has been found, are produced princi-
pally in Zaire, Zambia and Morocco. In 1970
the United States imported 92 per cent of its
cobalt needs, at a cost of $26.5 million.
A BILLION FOR ratrti
It seems fair to assume that, with the de-
valuation of the dollar (coming back up
again, however) and the steady increases in
consumption which have occurred, the cost
for imports of these four metals alone may
be well over a billion dollars lb 1974?not a
large bite of the H.S. national budget per-
haps, but a sizable factor in the balance of
payments.
As the energy crisis should have taught
decisionmakers, the important thing is
not only the cost but the Tact that U.S. na-
tional security and the welfare of the Ameri-
can people require absolute assurance of an
uninterrupted source of supply of raw ma-
terials essential to the economy.
It is reassuring to realize, therefore, that
unlimited quantities of the four minerals
here singled out are available to American
miners within three to four mires of cheap
and efficient transportation. The location is
at the bottom of the oecan, the transporta-
tion is by ship, and the three to four miles
is straight down.
All four metals, together with minor or
trace amounts of some 25 others, are found
in the manganese nodules that strew the bot-
tom of every ocean and even such large
freshwater bodies as the Great Lakes. The
average nodule is one to three inches thick.
The best commercial specimens lie in great
carpets on the Pacific floor in a wide band
running south of Hawaii from mid-ocean to
near the southern California coast.
Credit for discovery of the nodules belongs
to the scientists who made the historic globe-
girdling three-year oceanographic voyage of
the converted British corvette HMS Chal-
lenger in the 1870s. These first specimens of
the world's greatest treasure were tucked
away in the British Museum and for a time
forgotten. About the size and color of an
over-done meatball, they were easy to forget.
And, since they are found at depths of
12,000 to 20,00 feet, they could not then
have been reclaimed in quantity, even if
they had been blue-white diamonds.
There are several theories explaining the
origin of the nodules. A favorite one suggests
that metallic elements in sea water form
around any small nucleus, perhaps a bit of
sea shell, much as the pearl in an oyster
shapes itself around a grain of sand. Man-
ganese nodules are half buried in the mud,
and coverage of the bottom in the huge area
of known major deposits ranges from zero
to 50 percent. A workable mine site would
average 30 to 35 percent coverage, with a
concentration of about two pounds per
sqnare foot. Educated guesses place the
quantity in the Pacific alone at somewhere
between one and two trillion tons. The
growth rate is estimated at 15 million tons
a year, making the lode the only perpetually
self-renewing treasure since Aladdin lost his
lamp.
Mineable nodules are 35 percent or more
manganese, from 1 to 1.6 percent nickel,
.75 to 1.5 percent copper, .2 to .3 percent
cobalt and .05 percent molybdenum.
SCOOPING UP THE MEATBALLS
Getting the nodules to the surface and
into the holds of a mother ship is an awe-
some engineering feat. And there is no
precedent in land mining operations for the
problems involved in processing the raw
nodules in which the recoverable minerals
are distributed atom by atom throughout
the ore. Some ten years of quiet but expen-
sive experimentation by several companies
and syndicates appear to have resulted in
workable solutions to the engineering
problems.
American companies favor some type of
vacuum dredging, for the most part. In the
continuous-path method a dredge head
suspended by a conduit from the ship is
swept back and forth over the mine site,
Sucking up nodules as it goes. Fixed-area
dredging involves a collecting device, such as
a sunken barge, which remains stationary
until the ore lying within its sweeping radius
has been collected.
The second method, a Japanese invention,
employs an endless rope to which dredging
buckets are attached at intervals. The ship
moves sidewise as the revolving loop of
dredge buckets is dragged across the bottom,
scooping up the ore. By whatever method,
the prospecting phase alone can cost from
samo to $4,000 a day, and considerably more
for full production operations.
Several carefully unpublicized methods for
winnowing the metals also have been tested.
AU successful ones are believed to involve
hydrometallurgical techniques with sufficient
flexibility to accommodate the varying
character of the ore.
Most authorities agree that the United
States has a technological lead both in the
systems developed for nodule retrieval at
great depths and in the metallurgical proc-
esses for reclaiming the ores. This lead, say
spokesmen for the American companies in-
volved, is a fragile one, however, and will be
lost to aggressive foreign competition if not
promptly pursued. Japanese, West German,
and French interests are the most advanced
competitors. Russian capabilities, as usual,
are not fully known.
A dozen American companies have already
shown enough interest to invest substantial
research effort and seed money. There are
three leaders: (1) Deepsea Ventures, a sub-
sidiary of the Tenneco conglomerate, is be-
lieved to have invested well over $10 million
in sea mining programs since a go-ahead
decision in 1988?following years of earlier
investigative work. The DV ship Prospector
has sampled a number of potential mine
sites in the Pacific and in the course of more
than 30 cruises has brought back tons of
nodules to the company's pilot processing
plant at Gloucester Point, Va. (2) The Ken-
necott Copper Corporation has logged the
recovery of samples from more than 3,000
Pacific sites and brought back some 250 tons
for experimental processing in the company's
San Diego laboratory. (3) The Summa Cor-
poration, solely owned by billionaire Howard
Hughes, has an estimated $80 million already
invested and another $200 million committed
to a system designed to sweep up 5,000 tons
of nodules a day. The company is ready to
commence operations with the 36,000-ton
Hughes Glomar Explorer, built to order by
the Sun Shipbuilding and Dry Dock Co. The
sophisticated Hughes system includes a 324-
foot submersible barge designed to carry a
huge dredge head to the ocean bottom to
scoop up nodules and send them by com-
pressed air up a 16-inch pipe to the ship.
Nothing is known of the company's proc-
essing facilities.
Leigh S. Rattner, Director Tor Ocean Re-
sources, Department of the Interior, makes
some assumptions and predictions which
indicate the important role ocean mining
can be expected to play in the metals market.
Taking 1975 as a target year, he assumes
that mineral content of the nodules is ap-
proximately as estimated in the above (in-
dustry) figures, that there would be two
companies processing three million tons per
year and one company processing one million
tons per year. He further assumes that all
would be extracting close to 100 percent of
the reclaimable metals. Nickel production,
which he regards as the key factor, would
then fill 4.8 percent of U.S. primary nickel
demand and amount to 53 percent of pro-
jected imports. Manganese from the sea
would fill 12 percent of both demand and
imports. Copper would come to 3 percent of
estimated demand; 41 percent of imports.
The sea-produced by-product of cobalt, if
all of it were extracted, would be signifi-
cantly in excess of both demand and imports.
DON'T HOLD YOUR BREATH
Ratiner, who speaks authoritatively for
the executive branch of the government,
adds, significantly, that 1975 is not the date
to expect deep sea mining of such magnitude
to occur.
What, then, is the date? Soon? Ever?
The nodules lie deep on a near lifeless (and
therefore incorruptible) sea bed far outside
the widest and wildest claims of territorial
jurisdiction?even beyond the reach of the
Geneva Convention rules for exploitation of
the continental shelf.
Since U.S. firms know where the market-
able nodules are and have a pretty good
handle on the technology required to retrieve
and process them, what are they waiting for?
They are waiting, say the impatient miners,
for the 'United States government to spell out
protective guidelines enarpling them to s"?:e
out claims large enough and for a tenure
long enough to make possible a fair return
on the huge investment required.
But the United States government, says
the more patient State Department, is itself
waiting for a set of internationally accepta-
ble guidelines, preferably under the aagis of
the United Nations.
Which brings up the U.N.'s "Law of the Sea
Conference" scheduled for this summer in
Caracas, Venezuela. There the collision
courses of the "have" and "have not" nations
will converge, and they will hopefully ham-
mer out the framework, at least, for the first
truly global code of sea law since Hugo Gro-
tius, the 17th century Dutch lawyer, fabri-
cated the historic legal brief which led to the
"cannon-shot" rule for territorial waters and
the philosophic-legal concept of Mare Libe-
rurn, or Freedom of the Seas.
COUNTDOWN TO CARACAS
Also on the agenda at Caracas, in addition
to exploration of sea bed minerals, are use of
the sea bed for active and passive military
purposes, world fishing rights, limitations on
air overflights, commercial shipping, naval
operations, oceanographic research, marine
pollution and the jurisdiction of coastal
states over adjacent waters. Probably the
best that can be hoped for in any of these
numerous controversial areas is an all-nation
agreement or a series of area agreements
equally distasteful to all concerned.
There are few matters in which amicable
agreement will come easy, if at all. The highly
charged question of coastal state jurisdiction
over adjacent waters provides possibly the
best example.
Various national positions range from the
tenacious U.S. stand for the traditional
three-mile limit to the insistence by Latin
American states fronting the Pacific on a
200-mile limit that the conference provide
them economically important fishing mo-
nopolies in offshore currents.
There is more involved, here than fish, of
course. Most states now appear to favor, and
many insist on, a twelve-mile territorial
zone. But even that small increase would bar
free access, via Gibraltar, to the Mediter-
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ranean for the United States and to the
Atlantic for Russia. And Japan would lose
actress through the straits of Malacca, vital to
her filet iMpOrts, from the Persian Gulf.
Many other important straits Woula be
affected.
zs is no secret that the United Sta7.es is
prepared, however, to accept extension of
territorial limits out to 12 miler', provided
there are specific exemptions Made to guar-
antee continual rights of free passage
through narrow waterways of strategic Im-
portance to MS. military security and vital
commercial interests.
The United States Will probably also agree
to even broader "layered" zones in which
coastal states would. exercise varying degrees
of control over fishing, mining, pollution,
exploration and treasure hunting?but would
not have the right to impede unrestricted
passage by ship. It is conceivable, then, that
the High Seas with all of its traditional free-
doms for just about everything snort of pi-
racy will inerve from three miles out to 200
miles from the continental shores.
SEA BED WAR IN CONGRESS
American miners are concerned aboue how
their interests will fare in the trade-off:; that
probably will have to take piece hi the
smoke-filled committee roe= at Caracas if
agreements are to be reached. To strengthen
their own bargaining position, and as a hedge
against possible prolonged postponement or
outright failure of the Caracas Conference,
the influential American Mining Congress is
pushing a legislative program of its own in
the form of two identical bills: H.R. 9?
sponsored In the House by Represenoteive
Thornas N. Downing (D-Va.), chairman of
the House Oceanographic Subcommittee?
and S. 1184--introduced for consideration in
the Senate by Senator Lee Metcalf (D-Mont.)
Chairman of the Subcommittee on Minerals,
Materials and Fuels.
The Dorn/Metcalf legislation would au-
thorize the Secretary of the Inter or to issue
exclusive licenses to American citizens and
corporations to stripteine the ocean floor for
hard metals in blocked-out areas as largo as
40,000 square kilometers (about the KEG of
West Virginia, but to be reduced by 75 per
cent for actual commercial operations:, and
to conduct in-depth mining in much smaller
areas. Claims sponsored by "reciprocating
states" with comparable legislation would
also be recognized.
To maintain his claim a licensee worild be
required to invest substantial development
funds on an ascending scale, to maintain
continuous commercial recovery once started,
to protect the integrity of his working envi-
ronment, to avoid interference with other
ocean users, and to agree to arbitration of
disputes. The licensee's investrnent wotld. be
protected by government-administered but
miner-financed insurance against outside in-
terference and miners would be reimbursed
by the government for any loss due to neer-
national regulations agreed to by the United
States which would be less favorable than the
rights granted under the law.
There have been extensive hearings on the
bills by both committees. Senator Metcalf, a
former judge who believes in hearing all sides
of a case, has taken exhaustive testimony
from miner's, scientists, environmentalists,
State and Interior Department ?Melia, and
spokesmen for that potent new force in Amer-
Man, life,' groups of "Concerned: Citizens."
Congressinan Bob Wilson of ann Diego, a.
leading legislative authority on oceenog-
raphy, is also sponsoring legislation aimed at
promoting an immediate climate favorable to
deep sea mining on a commercial scale.
Such informed authorities as Ambassador
John R. Stevenson, special representative of
the President for the Law of the Sea Con-
ference, and Charles N. Brower, Acting Chair-
man of the Inter-Agency Task Force on the
Law of the Sea, believe the United States is
Morally bound to foreign unilateral legiela-
tion as long as there is a reasonable expecta-
tion of a "timely and successful" interna-
tional agreement, "Timely and successful"
means agreed-upon rules no later than sum-
mer 1975. They emphasized in their testi-
mony that the United States continues to
adhere to President Nixon's position that it
is neither necessary nor desirable to halt ex-
ploration and exploitation of the sea beds
during the negotieting process, provided
such activities are subject to the interna-
tional rules to be agreed upon, which rules
should include due protection of the integ-
rity of investment made in the interim
period.
Less temperate testimony from private
groups has characterized the proposed legis-
lation as a miner's land grab which would
-create a new arena for clashing jurisdictions
out of the last truly international area on
earth.
The most vociferous opponents of inde-
pendent national or private industry initia-
tives are the members, perhaps 75 or more,
or an informal bloc of developing nations
in Asia, Africa end South America who favor
an all-powerful. international authority to
direct all deep sea mining and apportion the
income derived from it. This bloc has rallied
under a banner which proclaims the deep
sea as "the common heritage of mankind."
This handsome piece of rhetoric is certain
to haunt the halls and resound from the ros-
trums at Caracas.
Meanwhile, the miners wait, spending addi-
Monet sums for exploration and experimenta-
tion until they can secure the protection,
national or international, they must have
to induce bankers and private investors to
help provide the capital?as much as $250
million for a one-unit operation?to go into
commercial production. Some, with little
faith in the Law of 'the Sea Conference, pri-
vately express the hope that the enigmatic
billionaire, seemingly independent of outside
capital and restraints, will press straight on
and that international law will then take
shape around a fait accompli as it so often
has in the past.
Most miners as well as many legislators
and leading oceanographers simply hope for
reasonably prompt action, national or inter-
national, that will make It possible to put
U.S. technology to work on a commercially
significant scale. They believe that a law
could be enacted by Congress flexible enough
to provide the necessary security for Invest-
ment capital now and to be fitted into any
all-nations agreement that might come later,.
If a mineral (earls as serious as the energy
crisis already hare is to be avoided, say pro-
ponents of the current legislation, there can
be neither weakness a will nor meanness
of spirit. The United States can afford to be
generous in cooperation with any interna-
tional sea-mining body of the future, because
there are minerals enough in the ocean for
all. What the country cannot afford is to
lot the opportunity to secure its own future
slip away.
If responsible private industry gets the
regulated backing it needle metals from the
deep sea bed will follow the fishing and un-
derwater oil industries as the third great
simmer of ocean wealth, and may some day,
hi fact, become number one.
Mr. FANNIN. Mr. President, members
of the Senate Interior Committee have
been following the efforts conducted by
the U.N. Seabed Committee leading up
to the Caracas conference.. We have ap-
proached this subject in a purely bipar-
tisan mariner by making our views
known to the administration on the is-
sues relevant to our committee's juris-
diction. As part of this effort we have
most recently transmitted to the Secre-
tary of State a letter reflecting the views
or this committee on two important is-
sues that will be considered by the con-
ferees at the Caracas meeting. One re-
lates to the seward limits of the Conti-
nental Shelf and the other pertains to
the regime for mining the deep ocean
floor beyond the limits of the Continental
Shelf. These views are definitively set
forth in the letter which I ask unani-
mous consent be printed in the REmailD
at this point.
There being no objection, the letter
was ordered to be printed in the RECORD,
as follows:
U.S. SENATE,
Come risme ON
INTERIOR AND INSULAR AFFAIRS,
Washington, D.(7, June 7, 1974.
Hon. HENRY A. KISSINGER,
Secretary of State,
Washington, D.C.
DEAR MR. SECRETARY: As you know,
con-
ference will convene in Caracas on June 20th
to attempt to negotiate a treaty or treaties
resolving international problems affecting
the law of the sea.
The Senate Committee on Interior and In-
sular Affairs has been following these nego-
tiations closely since the inception of the
United Nations Seabed Committee in 1967.
Since that time, on a continuing bipartisan
basis, members have participated in a special
subcommittee chaired by Senator Metcalf.
They have sent representatives to nearly
every session of the United Nations Seabed
Committee. Additionally, the Committee has
held several hearings related both to pro-
posed ocean mining legielation and to de-
velopments which have taken place at the
various preparatory sessions conducted by
the Seabed Committee. We have also met
with the United States delegation to the
Seabed Committee, usually prior to depar-
true and subsequent to its return from
these sessions.
Although several issuee will be considered
at the Caracas conference, this Committee
has confined its attention principally to
matters affecting the development of min-
eral and fuel resources. Our principal con-
cern has been directed to the following two
Issues:
The limits of coastal state jurisdiction
over resources of the, seabed adjacent to and
beyond the territorial eye and the nature
and the limitations of coastal state jurisdic-
tion and authority in such areas.
The rights of individual countries and
their nationals to explore and develop the
natural resources of the seabed beyond the
limits of national jurisdiction, the rules and
conditions and institutions which might
govern such exploration and development,
and the distribution of benefits resulting
therefrom,
Members of the Committee have frequently
made known their views about the policies
the United States should adopt regarding
each of these issues. With regard to the
former, members of the special subcommit-
tee, in their report of December 21, 1970,
expressed the following conclusion:
. . . we adopt the view of the American
Branch of the International Law Association
regarding the seaward limits of the Con-
tinental Shelf. That position is not only
consistent with the wisest of policy prefer-
ences, but more importantly soundly inter-
prets the present law. It holds that "rights
under the 1958 Geneva Convention on the
Continental Shelf extend to the limit of ex-
ploitability existing at any given time within
an ultimate limit of adjacency which would
encompass the entire continental margin."
We interpret the meaning of the term
"continental margin" to include the con-
tinental shell', slope and rise. We understand
that a growing number of countries support
the principle that coastal state jurisdiction
over natural :resources of the seabed adjacent
to its coast should be limited to that area
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Ane 17, 1974 CONGRESSIONAL RECORD -- UNATE
contained within that part of the seabed
which is bounded by .a line parallel to and
200 miles tilitarit,from the base line from
Which the territorial sea ,is measured. We
undetstand t4at_. ,sonie executive
branch agencies there is support for such a
petition. We wOnki JUs to state our strong
preference for the view which would allocate
to coastal itatesrareas of the seabed adjacent
to their Oasts, which extend seaward 200
Miles and, in ,addition; all portions of the
ContinentaApiargin which extend beyond 200
Miles. We ,have present rights under inter-
natiohal law to this area.
As you know, there are several areas of
? the United States continental margin which
extend beyond 200 miles. Because of the na-
tion's critical energy problems, including our
increasing dependence on imported oil, the
United States should not forfeit any portion
of the continental margin which could be
utilized for mineral production, and more
particularly, for production of oil and gas.
The United States has rights to all natural
resonrces-of our continental margin, no mat-
ter how far seawardly it extends. We should
not jeopardize these rights at Caracas.
- Regarding the issue of the regime for the
deep seabed, various options have been con-
sidered in preparing for the Law of the Sea
Conference. Many developing nations have
expressed a preference for the establishment
of an international seabed mining organiza-
tion, frequently referred to as "The Enter-
prise." It Would have exclusive authority to
explore and develop the resources of the
seabed beyond the limits of exclusive coastal
state jurisdiction. Through control of "The
Enterprise," the developing countries could
deny effective commercial access by the
technologically advanced states to the
natural resources of the seabed lying beyond
the. limits of. exclusive coastal state juris-
diction.
Many developed nations, including the
United States, have favored preserving as best
they can the existing high seas freedom in-
cluding, but not .limited to, the freedom to
conduct sicentific research, on the high seas
and to mine the minerals of the ocean floor
beyond the limits of exclusive coastal state
jurisdiction. These nations have not opposed
the creation of an international organiza-
tion to administer ;the exploration and de-
velopment of seabed resources lying beyond
th,e jinalts of exclusive coastal State juris-
diction, but they hav_e indicated the prefer-
ence that such an international organization
neither Conduct such exploration and de-
velopment Of the mineral resources of the
deep ocean floor, nor control production
thereof. They have tended to take the view
that we should neither restrict opportuni-
ties for exploration and development of the
deep ocean floor by developing countries, nor
object to paying a portion of the value of the
mineral production on the ocean floor to an
international organization, for the use and
benefit of developing countries. Also they
have continually expressed a preference for
some Sort of equitable licensing system which
an international organization would have
the authority to administer on a ministerial,
rather than,discretionary, basis. In other
WOKS, once an applicant state met the rele-
vant Standards, it would automatically be
eligible to receive a license from the inter-
national authority.
The principal commodity to be mined on
the deep ocean floor would be manganese
nodules which are rich in copper, nickel, co-
balt and manganese. There is a growing re-
luctance of mineral exporting countries to
Make these minerals available to the United
States on a secure and continuing basis. Our
heavy dependence on imports of such min-
erals places us in a vulnerable position.
Specifically, the United States dependency
on imports of such minerals is as follows:
manganese, 9'7%; nickel, 74%; cobalt
88%; and copper, 1807
it is vital to the national interest that the
United States companies retain their cur-
rent right of access to mine nodules lying on
the deep seabed under terms and conditions
conducive to =king the investments neces-
sary for their development. We believe this
objective should be vigorously pursued at
Caracas.
The Committee will follow the proceedings
at Caracas with great interest, and will look
forward to meeting with the members of the
delegation upon their return.
Sincerely yours,
HENRY M. JACKSON,
ALAN BIBLE,
PAUL FANNIN,
CLIFFORD P. HANSEN,
JAMES L. BUCKLEY,
JAMES A. MCCLURE,
DEWEY F. BARTLETT,
U.S. Senators,
THE PRIVATE SECTOR WASTES
MONEY TO JUST LOOK
Mr, PROXMME Mr. President, the
waste in the Federal Government has
been denounced broadly in the Congress
and out and it should be. As one of the
principle denunciators I not only plead
guilty but promise to keep it up, when-
ever possible.
Still the fact remains?not only that
the great majority of workers in the
Federal Government work hard and con-
scientiously, but there is also consider-
able waste in the private sector and in
some respects it is even worse.
'As a prime example of this I am in-
debted to Joe Cappo of the Chicago
Daily News who has just honed his type-
writer in on a beaut.
Mr. Cappo quotes from a press release
from the Cole Division of Litton Indus
tries, and just listen:
A group of secretarial students will att d
a one-day seminar to learn the skills of b
ing "executive coffee" for their futur m-
ployers. The executive coffee-brewing emi-
nar will include several coffee making cipes,
a primer on how to attractively set a sk for
coffee drinking, and a list of snack at are
advisable for consuming with coff at vari-
ous times of the office day.
Mr. President, can you agine the
fury with which this kin f seminar
would be greeted if it were ;nducted for
government secretaries d properly
so.
As Mr. Coppo asks, w could they not
offer a muse in back bbing, or shoe
polishing or runnin ut and getting
a pack of cigarettes.
Mr. President t fact that the Cole
Co., that is puttin n this extravaganza
is a subsidiary o he Litton Industries,
does not surpris Senator. No wonder
Litton is pus Lockheed and Grum-
man for the ord in cost over-runs on
defense con Is. Litton may not be able
to build a ip that will float, but I bet
they brew mean cup of coffee.
Mr. P ident, I ask unanimous con-
sent t the column by Joe Cappo be
printe in the RECORD.
e being no objection, the column
was rdered to be printed in the RECORD,
as lows:
S 1003
It doesn't have anything?to do th
marketing or advertising or any of the ther
subjects I normally cover. But it is t type
of item I hate to pass over without haring
with you.
I will quote from a press relea sent to
this newspaper by the Cole Divisio of Litton
Industries, which makes office f rnishings:
"A group of secretarial student/ will attend
a one-day seminare skills of
brewing 'executive coffee' for,. their future
employers... (the students a attend North-
western Business College, w h has no con-
nection with Northwester ? niversity. The
seminar will be at 10:30 m. Tuesday at
Space 1147 of the Merch'disc Mart.)
"'Coffee for American' xecutives ?at their
desks has become an ac pted way of corpo-
rate life,' states Richer ierney, Cole's presi-
dent. He notes that E pean secretaries have
been brewing coffe and tea?and some-
times even makin? unch for their bosses
for more than 100 y rs.
"'Today's exec ye secretary is not just
part of the all urniture like typewriters
or filing cabine ,' adds the Cole president.
'She acts as r employer's office hostess
making sure t t he and visitors to his office
are comforts e and presented with accept-
able ameniti '
"The exec lye coffee-brewing seminar will
Include se ral coffee making recipes, a
primer on ow to attractively set a desk for
coffee driIkIng,. and a list of snacks that are
advisable! or consuming with coffee at vari-
ous tim of the office day. . . ."
I thh this company is doing a good thing
fbr alVof executive-hood. I mean, what is
wors han having a secretary who can't brew
a dentcup of coffee?
e problem with the Cole division of
L' on Industries is that it is dull, unimagi-
tive and old hat. Women ... excuse me...
rls already have Mrs. Olson to tell them how
o make good coffee for The Man in Their
Lives.
What this company should have done is
offered a complete set of courses, not just a
measly one-day seminar.
For example today's secretaries, with all
that college training, don't rub executives'
backs as well as they used to. Cole could
easily offer a one-day seminar in Back Rub-
bing.
How about a course in Shoe Polish? Or one
In Running Out and Getting a Pack of
Cigarets?
"I'll bet our women readers have a lot of
suggestions like this for the Cole Division of
Litton Industries. They can mail them to
the company's local office, Space 1147, Mer-
chandise Mart, Chicago 60654. And send me a
copy at The Daily News, Chicago 60611.
FOOD: A RACE AGAINST THE CLOCK
Mr. KENNEDY. Mr. President, as
world food resources diminish and the
search for food becomes more acute
among developing states, many nations
will come to increasingly rely upon
the international community?particu-
larly the United States?to help meet a
major portion of their food require-
ments. The world-wide cost of food
grains is not only growing prohibitively
high for hungry nations, but in order to
meet this burden, foreign exchange re-
serves are being diverted from essential
development programs to purchase food.
A food deficit spiral" is slowly be-
ginning to drain both the resources and
W EN?ER?GIRLS, KEEP THAT MAN HAPPY I energies of developing states?affecting
(By Joe Cappo) not only the economic viability of al-
I think there might be some women in the ready improverished countries but the
udience who will
Squirm little a e as they read very foundations of their institutions as
In light of this dependency, we feel that this column. well. M the price of food begins to exceed
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S 10704 , CONGRESSIONAL RECORD ? SENATE :Tune 17, 197:
d sent sources through more
World are less hopeful now than they were effective production practicei.
lest fall. Most developing countries will be There are, of course, multinational corpo-
especially short of foreign exchange reserves rations doing these things now, especially in
their ability to Pay, the United States can
take little satisfaction from title short-
term harVeft of dollars it is reaping from
internatio food purchases.
Mr. rresid t, one of the greatest con-
tributions w we as a people have
made to develo nations has been our
commitment to II support their efforts
to reach economic if-sufficiency Yet,
this critical nom= aid is now likely
to be diverted, to b American food
rather , than to forge onoinic: inde-
pendence with American p. If we are
to stop this food deficit sp if we are
to help ensure the success of foreign
assistance, then our Govern t must
begin to recognize the impendin world
food crisis and assist in the plann
a coherent international food polio
Our Nation will be a crucial force
the forthcoming World Food Conferenc
which will be held this November in
Rome. The current optimistic forecasts
for better world food yields this year
can not only buy the international com-
munity additional time in the immedi-
ate days ahead to plan food policies, but
will also enable the United States to pre-
sent a viable program as an alternative
to a deteriorating minimum World fool
security in an atmosphere of mutual co-
operation rather then mutual suspicio.
Mr. President, I would like to draw
to the attention of Senators three arti-
cles appearing in the New York Times
and the Baltimore Sun, and I ask unan-
imous consent that they be printed in the
REcoan.
There being no objection, the articles
were ordered to he Printed in the REC-
ORD, as follows:
[From the New tork Times, June 16, 19741
A RACE AGAINST TELE CLOCK ON FOOD
(By Roger E. Anderson)
The world toed problem we are s)
Ware of today shares with moat ether so-
called crises a curious duality: it was. at
once foreseeable and foreseen but still un-
recognizable until the last minute.
Ever since Thornart 'Malthus proposed. in
1798 that people might someday multiply
themselves out of food, the idea has been
hovering ?agilely in our oonscidusness. For
some, the reality has been deadly epprixert.
A Malthus:Ian moderate, which many food
experts seem to have become, would note
dispassionately that the problem ins tnree
dimensions?time, population, and produc-
tion.
With world population growing at an an-
nual rate of 2 per cient, we have perhaps
20 years, or roughly until the year 2000, to
control population greirth or to raise -food
production to stiftioletit levels around the
wand so that all people can afford to eat,
or beth. After that, unless the situation has
been remedied, the lid blows off the pressure
ceeetetetelnn. ferecetters are prepared' even
toIMagine the tonsequences if that should
The short-term leu4doek is not encouraging,
and it 'Servos to den* with grim preci sten
the nature of the long-range problems at. eed.
The current smelt), of major agricultural
commodities and the large draw-down of
world food reserves menace the poorest and
slowest-growing countries most seriously.
The developing nations may have to pay
some ialfi WM= more for essehtlid imports
in 1974 than they did in 1973. They are so
gravely threatened by increasing food and
fertilizer prices and almost intolerably high
en prices that the prospect or disaster with-
in the next Wend years is real, arid we May
Food production prospects for the Third an improve pre
as a result of the increase in energy prices the fields of food growing and processing,
last December, sled shortages of imported commercial fishing and fish meal production,
energy, fertilizers, pesticides and other agri- farm machinery, pharmaceuticals and others.
cultural inputs consequently will be s,ggra- There is ample room for more,
vated. The higher :prices they will receive for The developing nations have limited re-
their own relatively small commodity ex- sources. Their economies show diverse pat-
ports will not significantly offset their higher terns but they share a common ability to
import costs, frustrate private enterprise. Some seem to
Important parts of the world are, in fact, prefer outright aid because of their reluc-
approaching the precarious line between sur- tance to deal with private, profit-making in-
vival and disaster. To take India as an ex- terests. This ignores the fairly-well deco-
ample, if?on top of all its other burdens? mented claim that one dollar of private in-
it were to suffer a monsoon failure, the con- vestment in technology is more effective than
sequence could be a famine in which literally three dollars in outright aid
millions of lives would be lost. The shock
of those deaths would rattle social, political
and economic windows around the world.
In any discussion of world food problems
the question. of -reserves invariably arises.
It is widely expected that the outlines of
me form of global food reserve system will
erge from the United Nations World Food
erence to be held in Rome this No-
And It is of special significance that
such system supposedly will be accom-
panied plans for an international effort
to lucre food production in the develop-
ing count
When the ord reserves is mentioned heads
immediately im in ,the direction of the
United States, 7 two decades the world's
principal reposi v of grain stocks and bal-
ance wheel of f [min These stocks have
now been largely d cited. The present posi-
tion, as expressed by tare, of Agriculture
Earl. L. Butz and m rs of his depart-
ment, seems to be the e United States
is not opposed to the buil e of reserves and
will cooperate in such an ort with other
nations.
The United States cannot, h ver, accept
the complete responsibility carrying
these reserves. That reeponsibilit a global
one, to be shared by other nation includ-
ing the developing ones.
Moreover, in the long run people ot
continue to be fed from reserves. Food ust
come essentially from annual produc
and. the immediate and long-range eh
lenge, therefore, :Ls to plan to produce
instead of planning to store it.
Logic and intuition alike tell us that the
ultimate solution to the food problem lies
In production and development?and they
go hand in hand.
International efforts, such as provided by
the World Bank and the Agency for Inter-
national Development, need to be increased
to assist agricultural development in the de-
veloping nations. Many of these have exten-
sive but untested agricultural potentials.
The countries where "green revolution" prac-
tices have been applied have shown that
meaningful increases in food production are
possible there at substantially rower costs
thin for comparable increases in some of the
more agriculturally advanced nations.
Ultimately, I believe, agriculture in the
emerging nations will have to become more
an industry and leis 'a personal way of life.
In the process it will have to develop along
lines that will allow it to regenerate its own
capital through profits. Initially, however, it
will require seed capital, which could be pro-
vieed by national governments, international
oreanizations, bilateral arrangements with
the United States or multinational com-
panies and financial institutions.
Last March, speaking to a group or buei-
ne:ismen and Government officials in Tokyo,
,uggested that the multinational agricul-
tural corporation could be an effective ve-
hicle for infusing capital into the now labor-
inteneive farming systems of developing na-
tions, forprograms transrihlttllhgleading to
the development of technical and farm man-
agement skills and for marshalling local in-
To be as realistic as possille, private enter-
prise faces a number of possible hazards in
doing business in these countries: currency
devaluation, restraints on the repatriation of
profits, expropriation, revolution and, lately,
kidnapping.
These are sobering risks, but risk is private
enterprise's middle name.
In many cases where it hes been done suc-
cessfully the key to entry into the opera-
tion in developing nations has been the
joint-venture approach, win re the host coun-
try has substantial participation in the enter-
prise. Several combinations are possible.
A government may want to process the raw
materials its land can produce but must
import the technology to ilo so.
Private capital may be introduced into a
nation that will provide its iewn public funds
for the building of port facilities, roads and
infrastructures.
A government may agree to provide labor
and materials in exchange for private capi-
tal. and management.
Methods of payments differ, sometimes
taking the form of long-range contracts by
which the company can buy the host coun-
try's products at fixed prices.
It is likely that ventures of this kind will
increase as developing nations become more
convinced that they offer greater benefits,
with fewer springs attached, than other
varieties of assistance. It has been docu-
mented, for instance, that in one country
nationally owned and managed fertilizer
plants .consistently average only about 60
r cent of efficiency, a rate that is not
ective and certainly not profitable. When
United States multinational corporation
en ed the picture, a typical plant was..
bro t up to about 85 per cent of capacity
in a tively short time.
If t. multinational company is going to
make t contribution that it can toward
easing or lying the food shortage problem,
it will, in e nature of things, keep an eye
OIL its proft and growth in sales?but not
exclusively. I 111 also have to show increas-
ing concern its 'positive effects on the
totality of the h country and demonstrate
its social and fi a ial accountability.
The company w have to give evidence
that it is providing e I,ost country with
contributions toward increase in efficiency
of local enterprise, the Tarn flow of capi-
tal and technology, emp ment growth, the
national ability to. comp in the world,
balance-of-payments impr ment and tax
revenues.
The food crisis for the deve'lag nations
is real and it is dire. It has t potential
to become disastrous, but we h that it
will not?and business shares an igation
with other sectors of society to work ? pre-
vent that eventuality.
One encouraging sign we might loo o
would be the emergence of a strong?perh
collective?initiative by these struggli
countries by actively -seek from the business
community some forms of productive, devel-
opmental participation that would be at least
tolerable within their societies. They might
be astonished by the quantity and quality
of the response and by the results of that
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