FOREIGN ASSISTANCE ACT OF 1974

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00957A000100020017-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: June 9, 2005
• Sequence Number: 17
• Publication Date: December 12, 1974
• Content Type: OPEN

Approved For Release 2005/06/16 CIA-RDP79-00957A000100020017-0
December j2, 197 CONGRESSIONAL RECORD - SENATE
the aisle. The first amendment would
provide-
The PRESIDING OFFICER. May the
Chair inquire of the Senator? Does he
ask unanimous consent-
Mr. ROBERT C. BYRD. That they be
considered en bloc.
Mr. President, I withdraw my request.
Mr. LONG. Mr., President, I would be
willing to withdraw my amendment so
that the. Senator could off er his. _
I withdraw my amendment tempo-
rarily.
Mr. ROBERT C. BYRD. But Senator
HARTKE has the right to the 'floor. He
has unanimous consent that he retain
the right to the floor. If the Senator
withdraws his amendment, he has the
floor and the Senator's amendment is
not in.
Mr. President, I withdraw my amend-
ments. Just forget about it.
Mr. LONG. Then I leave my amend-
ment as the pending business.
Mr. ROBERT C. BYRD. 'Mr. Presi-
dent, I ask that my two amendments be
printed and that they meet the reading
requirement under rule XXII.
The PRESIDING OFFICER. Without
objection, it is so ordered. Senator
LoNG's amendment is still pending.
Mr. LONG. In view of the fact that
this might present a parliamentary
problem-
The PRESIDING OFFICER. The
Chair understood that the Senator re-
President. -
The PRESIDING OFFICER, Very well.
FOREIGN ASSISTANCE ACT OF 1974
Mr.. ROBERT C. BYRD. Mr. President,
on behalf of Mr. FUiBRIGHT I ask the
Chair to lay before the Senate a mes-
sage from the House of Representatives
on S. 3394.
The PRESIDING OFFICER (Mr.
HELMS) laid. before the Senate a message
from the House of Representatives in-
sisting upon its amendment to the bill
(S. 3394) to amend the Foreign Assist-
ance Act of 1961,, and for other purposes,
and requesting a conference with the
Senate on the disagreeing votes of the
two Houses thereon.
Mr. ROBERT C. BYRD. I move that
the Senate agree to the request of the
House for a conference on the disagree-
ing votes of the two Houses thereon, and
that the Chair be authorized to appoint
the conferees on the part of the Senate.
The, motion was agreed to; and the
Presiding Officer appointed Mr. FZJL-
BRIGHT, Mr: SPARKMAN, Mr. CHURCH, Mr.
SYMINGTON, Mr. HUMPHREY, Mr. AIKEN,
Mr. CASE, and Mr. JAVITS conferees on
the part of the Senate.
TRADE REFORM ACT OF 1974
The $eite continued with the con-
Ideratipn. of the bill (H.R. 10710) to
zl,o>'idlsgriminatory, an air world eco-
n0#nic,sys em, to stimulate the economic
growth of the United States, and for
other purposes.
521283
d Europe and Japan. The European Coxn-
Mr. .
HAnTKE. Mr. President,
since World Wa
changed markedly
haII, So has America's position in the
world. These changes: must be reflected
in our Foreign Trade Policy.
The assumptions of American trade
policy after World War II were that
America must give blood to restore a
bleeding world; and that to do so was in
our long-range intere$t-both economic-
ally and politically.
Because we did not wish to see com-
munism take over the chaotic economies
of Europe and Japan after World War
II, and out of a sense of simple human-
ity, we decided to give generously to re-
store those ailing nations. We gave
funds; we gave technologies; and we
threw our markets open to the products
of these other nations. Our immediate
objective was to fortify these endangered
countries against communism. Our long-
range expectation was that these, and
other nations, upon recovery would be-.
come good customers for America.
We were able to pursue this policy with
minimal pain to our own people. The war
had wrecked the productive plant of
many nations. The United States nomi-
nated world manufacture easily. Much of
the money we gave away came back to
us in the form of purchases of American
machinery and commodities.
By the 1960's, however, our role had
changed-not because we consciously
altered our cqurse but because of a
changed world situation. Europe and
Japan were no longer weak and bleeding
economies about to collapse. The Com-
mon Market was on its own; and Japan
was reaching well beyond its own. What
is more, both the Common Market and
Japan viewed themselves as America's
prime competitors. While continuing to
count on America's market as an outlet,
they made it increasingly difficult for
America to get into their markets.
Mr. President, certain portions of the
Finance Committee report on the trade
bill very accurately describe the changes
in the United States and world econ-
omies since 1960. I should like to quote
extensively from those sections. The re-
port states:
During the early 1960's the U.S. economy
Itself moved from stagnation to respectable
growth without significant inflation. Begin-
ning in 1965 an inflationary trend developed
which has grown progressively worse. In-
flation in the United States has now reached
a level unprecedented in peacetime.. . .
Endemic inflation led to extraordinary bal-
ance of trade . and payments deficits be-
tween 1970 and 1972 which in turn created
aasosive run against the dollar. After the
U. culd no longer maintain a fixed parity
b een the dollar and gold, the fixed ex-
s in the economy, creating shortages of
materials and leading to the imposition
ve advantage (e.g., soybeans).
As the U.S. economy underwent significant
internal changes during the 1960's and early
1970's, the U.S. economic pre-eminence in the
world economy declined relative to western
munity, born in 1958 in the Treaty of Rome,
has become the world's largest trading bloc,
with exports and imports now exceeding
three hundred billion dollars. The com-
munity's share of world GNP, world trade
and world reserve assets has grown mark-
edly since the 1960's, and this trend has ac-
celerated in the 1970's.
The growth of the Japanese economy has
outstripped even that of the European com-
munity. Real growth in Japan grew at the
phenomenal rate of 10.5 percent a year for
the period of 1960 through 1972, as compared
with 5.0 percent in Italy, 4.5 percent in West
Germany, 4.1 percent in the United States,
and 2.7 percent in the United Kingdom. By
almost every economic indicator of growth
Japan has been the world leader. In terms
of military or tax burdens, however, Japan
is at the bottom of the list. The Achilles Heel
of the Japanese economy-the overwhelming
dependence of Japan on foreign oil-has
interrupted Japan's record of remarkable
economic growth.
Less-developed countries (LDC's) as a
whole progressed fairly well during the 1960's
in terms of their economic growth and their
balances of trade and payments performance.
Between 1960 and 1972, real economic growth
in the LDC's averaged over the 5 percent goal
set for the 'decade of development'. By the
fall of 1973, these countries had rccumulated
$40.6 billion in international reserve assets
compared to $10 billion in 1960. By the end
of this year the international reserve assets
of 'LDC's' may exceed $100 billion.
These overall figures, however, mask wide
divergence in performance. Oil-producing
'LDC's' are holding western economies at
bay through massive price increases. Other
LDC's also possessing important natural de-
posits have been attempting to form their
own producers' cartels to obtain a maximum
rate of return on their resources. Those
LDSC's without such strategic resources are
facing financial collapse.
The finance committee report gives
recognition to the changing, role of the
United States in the world economy and
the deterioration of the U.S. balance of
payments as follows :
The Value of World Exports increased
from $129.6 billion in 1960 to $575 billion in
1973. Normally, such a four-fold increase
would suggest a growing world inter-
dependence and a more efficient utilization
of world resources. Unfortunately, however,
much of the increasing volume of trade was
attributable to inflation and occurred within
preferential and discriminatory trading
arrangements. For example, among the con-
tracting parties to the general agreement
on tariffs and trade (the GATT)-despite
their pledge of nondiscrimination as a
fundamental principle for achieving trade
liberalization-the proportion of imports
entering at preferential rates increased from
ten percent in 1955 twenty-five percent in
1970, and the proportion will grow signif-
icantly with the enlargement of the Euro-
pean Community.
One result of discriminatory trade prac-
tices has been a decline in the U.S. share of
world trade. While the value of free world
exports more than quadrupled between
1960 and 1973, the U.S. share underwent a
steady decline from 15.9 percent in 1960, to
14.6 percent in 1965, and to 12.4 percent in
1973....
The performance of the United States in
the world economy throughout much of the
postwar period has been marked by per-
sistent trade and payments deficits . . .
measured on the most accurate and mean-
ingful basis, which would include the cost
of insurance and freight in the value of our
imports and exclude the soft-currency and
.Approved For Release 2005/06/16 CIA-RDP79-00957A0001000200177-0
 Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0
S 21284 CONGRESSIONAL RECORD-SENATE December 12, 1974
other Foreign-aid-financed shipments from
the value of our exports, our trade account
has been in deficit since 1966. In 1914, our
trade deficit, measured an a C.I.F, basis, is
running at an annual rate of almost $12
billion. These recent trade deficits have
accounted for over one-half of our overall
pyame to deficits....
Goverment expenditures abroad have also
been a large contribtuor to the deficits in
our international accounts. Between 1950
and 1973l Government expenditures for
both mill y and economic aid caused a
drain of $14 8 billion in our overall interna-
tional accoux . which is about equal
to the growth?n foreign country monetary
reserve assets or this period."
The report gocon to state:
For many years ,is country relied on a
trade surplus to offset foreign aid, military
expenditures abroad,,,. as well as overseas
private investment. Tht surplus, which was
never large enough toset such expendi-
tures, has now disappe`ed. In 1962, the
nation had a modest trades rpli.is of approxi-
mately $1.1 billion (C.I.F.) d a balance of
payments deficit of $2.9 b ion (liquidity
basis). Ten years later the mo At trade sur-
plus had become an $11 billioi :deficit, and
the payments deficit had grown m a bear-
able $2.9 billion to an intolerab 13.9 bil-
lion. Not surprisingly, the dollar ha become
unwelcome in many of the capit ylof the
world and underwent a series of devalu Lions.
In 1973 there was a temporary imp
in U.S. payments and trade bales '' es
(largely attributable to grain exports to e
Soviet Union which many believe corgi,
tributed importantly to the 8.8 percent infl a
tion of 19'l3. Hopes for achieving a reason-
able balance in our international accounts
this year have been dashed by mounting
deficits attributable to the increased costs
of oil imports. In 1974, the United States
will spend approximately $27 billion on oil
imports; by the year's end, the nation's
trade deficit (C.LF) will be well over $10
billion.
Throughout the postwar years, the United
States has, in effect, premised much of its
trade, aid, and monetary policies upon a
balance of trade surplus which, in fact, was
diminishing and by 1966 had disappeared
altogether.
Mr. Pre :sident:, in the postwar years, the
United States has been the only major
country in the world whose share of world
exports has decreased while its share of
world imports has increased. In the
space of a mere half dozen years-1964
to 1970-the U.S. share of world exports
fell by more than 11 percent. while its
share of imports rose by more than 17
percent.
This unfavorable trade balance is espe-
cially marked in manufacturing, the eco-
nomic sector of most immediate and in-
timate concern to American labor. The
U.S. share of world exports of manufac-
tured products has fallen from 27 per-
cent in 1958, to 21 percent in 1970, to
19 percent in 1971; a decline of almost
30 percent in a dozen years.
Few American-made items can with-
stand the pressure. In the 1950's, only
about 30 percent to 40 percent of the
imports were comparable with U.S. prod-
ucts. Now, about three-quarters of the
imports compete with U.S. items, accord-
ing to the U.S. Depart of Labor.
In a number of industries there has
been an absolute loss of jobs-fewer
workers today than a few years ago. In
women's apparel alone, the number of
workers declined absolutely by more than
40,000 between 1956 and 1971. In elec-
troni, a, there Was a loss of 109,000 jobs
betw~'en 1966 and 1972, according to
Labor Department figures. In shoe man-
ufact?u?e, jobs declined from 233,000 to
about; 200,000 in the past ii years.
While the figures on job loss reveal
part of the problem, they tend--by their
impersonality-to conceal the human di-
mensions of the tragedy. The people em-
ployed in labor-intensive industries--t,rte
hardest hit-tend to be drawn largely
from the Nation.'s marginal populations:
black. Hispanic, poor white. recent imm -
grant., To these people, the labor-inten-
sive industry-with its openings for urt-
skilled and semiskilled labor--was the
gateway to the economy. As these plants
collar >e, the hors of these people col-
lapse.
The, Finance Committee report calls
attention to the relationship between
forelgti trade and domestic jobs as
follov s:
In recent years, the United States has e:-
perien 'ed a series of trade and payments
deficits, several dollar devaluations, and a
rate of inflation unprecedented in peacetime.
The Nation's economy has continued its long,
slow drift away from labor intensive indus-
tries, a.nd toward service industries. Especial-
ly significant has been the shift in the struc-
ture of U.S. employment . . . In 1960, nearly
one-third of our U.S. nonagricultural em-
ployment was in manufacturing. Since 1960,
however, manufacturing employment has de-
clined steadily to a position were barely one
in four workers is gainfully employed in
,anu`acturing....
is cur Nation's employment in manu-
balaW'e in manufacturing has declined abso-
lutely'; In 1960 the United States had a trade
surphi a to manufactured goods of $5.2 bil-
lion. B y973 we had a deficit of $3.4 bil-
lion. ?? n contrast, West Germany ai$o
had a urpl of $5.9 billion in 1960, but by
1973 t hat sti lus had burgeoned to $28.7
billion man's modest surplus of $2.6
billion in 1960 aci exploded into a $23.3 bil-
lion surplus by
Mr. President, i addition to reviewing
the dramatic cha es in the United
State- and world ec omiei; since World
War IF, calling attentl to the cleterior-
ating U.S. balance of pa tints, and not-
ing the relationship bb,ween foreign
trade and domestic emp yment, the
Finare'e Committee report d m:ents the
dismol failure of recent oU ., foreign
U.S. trade policy has not been . 1 2 1 for
its coherence or consistency. Throe ?hout
most ,r the postwar era, U.S. trade l icy
has been the orphan of U.S. foreign poi
Too often the executive has granted tra s
concesr;ions to accomplish political objec-'
tives. 'rather than conducting U.S. interna-
tional economic relations on sound economic
and ooiomercial pri:iciples, the executive has
used trade and monetary policy in a foreign
aid coe,text. An exe.mple has been the execu'
tive's eanwilllngness to enforce U.S. trade
statute-1 in response to foreign unfair trade
practi .s. By pursuing a soft trade policy,
by refusing to strike swiftly and surely at.
foreign unfair trade practices, the executive
has actually fostered the proliferation of bar-
riers to international commerce. The result
of this misguided policy has b, I een to permit
and even to encourage discriminatory trading
arrangements among trading nations.
Thc report goes on to state :
Twelae years have passed since the Con-
gress enacted the Trade Expansion Act of
1962. A great amount of international eco?.
nomic history has occurred in the inteven-
ing years. In the opinion of the committee,
much of that history has been unfavorable to
this country, largely because of the anti-
quated rules of the international trade and
monetary systems and the related lack of
genuine cooperation and reciprocity in in-
ternational economic relations.
The Kennedy round of trade negotiations
brought about some of the largest tariff'
reductions in the history of the United
States. Unfortunately, the Kennedy round
did not remedy fundamental inequities in
the world trading system. There was no re-,
form of the institutional structure, nor was
there any significant progress in dealing with
nontariff barriers or distortions of interna-
tionaI trade. Our trading partners, most
notably the European community, devised
new ways to pursue protectionism, particu-
larly in agriculture.
Mr. President, despite this insightful
analysis of the important changes in the
world economy and of the role the United
States plays in that economy, despite the
worsening situation documented in the
U.S. balance of payments, despite the
relationship cited between U.S. foreign
trade and jobs, and despite this lucid in-
dictment of recent U.S. foreign trade
policy and practice; the committee' re-
port calls for enactment of the Trade
Reform Act.
Mr. President, I come to a different
conclusion. I say it is time the United
States based its foreign trade policies on
the realities of the 1970's rather than the
fictions of the 1960's. This bill does not
represent a departure from past U.S.
trade policies. It is merely a warmed-over
version of U.S. policies during the 1960's.
A warmed-over version of trade policies
which did not achieve their goals during;
the last decade, and certainly will not
achieve their goals during the present
decade.
My colleague, Representative Jnafas
Buxs;s of Massachusetts, accurately char-.
acterized this bill and the U.S. trade sit-
uation on,the floor of the House of Rep-
resentatives on December 7, 1973, when
he stated:
This is not a bill for the seventies, but a
patched-up version of the trade expansion
act of 1962 and other statutes. The bill ig-
nores the changes of the 1960's, when the,
United States became a net importer of many
manufactured products and parts of prod-
ucts. The bill ignores the changes of the
1970's when the United States found itself
with more imports than export,-a $6.4 bil-
lion deficit in trade in 1972. In 1972, imports
rose even more rapidly than in 1971-up 21.9
percent. In the first 6 months of 1973, im-
ports shot up even faster, especially from the
lowest wage countries of the world. Yet this
fa used products. The United States sud-
de finds it necessary to bid for raw mate-
rials 1%V energy supplies.
The kited States now imports the auto-
mobiles, el, radios, and TV sets it once sent
to the rest f the world. Shoe imports and
textile and a>5laarel imports have been joined
by inrushes inrushes o omputer parts, calculators,
aircraft engines, d parts, as well as other
product lines. This hange has eroded Amer-
ica's industrial siren h and added costs to
the economy in lost j and production of
parts and whole produ in almost every
kind of manufacturing, froii apparel to aero-
space. These and other losses endanger serv-
ice employment and the tax base of American
communities and the American economy.
Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0
 Approved For Release 2005/06/16 CIA-RDP79-00957AO00100020017-0
december 12, 1974 CONGRESSIONAL RECORD -HOUSE
They may be squatting all day in their Israel is vital for the security of that
gs waiting in front of a government ra- small nation which faces such a tremen
stoning shop. !dous burden in paying off debts in-
There isn't enough food for everyone, so curred during the October war and re-
,the government divides evenly among them, building its defense establishment. As
;two pounds of wheat for each person every the committee points out in its report,
15 days.
the United States can maximize its in-
until dusk. There is nothing else to do. Arab nations which must join with
Israel in negotiating a lasting settlement.
the bill contains au-
For that reason
,
MERITS AND DEFICIENCIES~OF THEFOREIGN ASSISTANCE ACT dan, thorizations
along g for with a aid discretionary special
The SPEAKER pro tempore. Under a requirement fund.
previous order of the House,-the gentle- - It is important to note that none of
man from Massachusetts (Mr. DRINAN) the funds authorized by this legislation
is recognized for 10 minutes. are earmarked for the oil-producing na-
Mr. DRINAN.,Mr. Speaker, it was with tions which have reaped an enormous
reluctance that I joined with a narrow windfall at our expense during the past
plurality of the House yesterday in sup- year. I am also gratified that the bill
porting the final passage of H.R. 17234, prohibits the use of foreign aid funds
the Foreign Assistance Act of 1974. While for the construction of nuclear power-
I believe-that the American foreign aid plants in the Middle East in fulfillment
program has, played'an important part of agreements negotiated by former
in the preservation of world peace and in President Nixon earlier this year. I have
'NX
-
th
ith
er -
many o
the welfare of developing nations over previously joined w
the past few decades, I have long been bers of Congress in expressing strong
troubled by the amount of military aid disapproval of injecting nuclear tech-
provided to governments which deprive nology into this volatile area of the
their own citizen's of fundamental human world. On the whole, the Middle East
`freedoms. Moreover, in recent years, the package appears to constitute a respon-
executive branch has abused the foreign sible and constructive approach to our
aid program by transferring funds ap- sincere efforts to bring a just and last-
priated for worldwide economic and nu- ing peace to the Middle East.
tritive assistance to supplement military HUMANITARIAN ASSISTANCE
aid to South Vietnam and Cambodia. The Foreign Assistance Act contains
These flaws cannot be ignored in evalu- an authorization of $470 million for food
ating the overall impact of American and nutritive assistance vitally needed by
foreign aid. the world's underdeveloped nations. In
On balance, however, I believe that the addition, $150 million is authorized for
merits of the Foreign Assistance Act en- population planning programs, crucial to
acted yesterday outweigh its deficiencies. the formulation of a long-range solution
This legislation, which authorizes ap- to the world food problem. As famine
proximately $2.5 billion in economic and to threatens of Africa, to bring widespread starvation
military aid for fiscal 1975, will enable parts United Latin America, and
the United States to meet its commit- South Asia, the Unitted States must not
imme-
ment to bring a lasting peace to the Mid- largest its responsibility, producer, to as provithe de world's
food prooducer, to
die East and to help alleviate the food diate largest help.
which imperil many of the AID TO AUTOCRATIC GOVERNMENTS A SERIOUS
world's developing nations. Moreover, the DRAWBACK
bill contains a number of important pro- The section of the bill which troubles
visions which strengthen congressional the authorization of more
control over the expenditure of foreign me than greatly lyl is is tha authorization more
assistance funds by the executive branch.
In countries under repressive, authoritarian
composing this legislation, the For- rule. As a symbol of democracy and hu-
eign Affairs Committee took the first liberty to much of the world, the
tentative steps toward reducing military man United States should not be spending the
aid to undemocratic, repressive govern- taxpayers' money to support dictator-
ments. Finally, amendments added on ships in nations such as Brazil, Bolivia,
the floor yesterday cutting off aid to Tunisia, Spain, the Philippines, South
Turkey and reducing assistance to South Korea, Cambodia, and South Vietnam.
Korea and Cambodia helped to meet my The Foreign Assistance Act passed yes-
chief objections to the bill. terday did contain some important limi-
THE MIDDLE EAST PACKAGE tations on aid to governments whose
Probably the single most important domestic policies are inimical to our own.
component of the Foreign Assistance The Foreign Affairs Committee elimi-
Act is the so-called Middle East pack- nated nearly all proposed military aid
age which authorizes slightly over $1 to Chile and placed a ceiling on military
billion in military aid and security sup- aid to South Korea. Amendments adopt-
port assistance for Israel, Egypt, and ed on the floor of the House placed a
Jordan. In addition, a special require- more restrictive limit on authorized as-
merit fund. of $100 million is established sistarice for South' Korea and a strict
for use by the President at his discre- limit of $377 million on all aid to Cam
tion, with the consent of Congress, In bodia. Although this level of assistance
helping to bring peace to the Middle to Cambodia is still excessive, in my view,
East. it is,only half of the amount requested by
The $550 million in the bill authorized the administration. I was pleased to join
for military'and economic assistance to with a large majority of my colleagues in
II 11785
adopting -an amendment reaffirming our
commitment to cut off all military aid to
Turkey until that nation ceases its ag-
gression on Cyprus.
The House signalled its intention to
move more decisively in the future
against continued aid to repressive gov-
ernments by. including a provision ex-
pressing the sense of Congress "that, ex-
cept in extraordinary circumstances, the
President shall substantially reduce or
terminate security assistance to any gov-
ernment which engages in a consistent
pattern of gross violations of interna-
tionally recognized human rights...." I
deeply hope that this verbal commitment
will be translated into an intensive re-
view of the domestic policies of our aid
recipients with the aim of eliminating aid
to those governments which refuse to re-
spect fundamental human rights.
IMPORTANT ASSERTION OF CONGRESSIONAL PRE-
ROGATIVES IN FOREIGN AFFAIRS
The provisions of this bill expanding
congressional oversight of executive
branch expenditures related to foreign
assistance have great implications for
the reassertion of proper congressional
prerogatives in the field of foreign af-
fairs. In fiscal 1974, the United States
sold more than $5.9 billion in arms and
military goods to foreign nations. These
sales were arranged and sanctioned by
the executive branch without so much
as advance notice provided to Congress.
Since the sale of arms has become an
important component of American for-
eign policy, it is vital that Congress, as
the elected representatives of the peo-
ple, have full knowledge of such sales
along with the power to disapprove
them. The Foreign Assistance Act passed
yesterday requires the President to re-
port major arms sales to Congress in
a timely fashion and empowers Con-
gress to veto such sales by concurrent
resolution.
The legislation prohibits the use of
funds by the Central Intelligence
Agency for activities in foreign coun-
tries other than intelligence-gathering,
unless the President certifies that an
operation of another sort is important to
the national security and describes the
nature and scope. of that operation in
writing to the appropriate committees
of the Congress. Although I believe this
provision is deficient in its failure to
permit a congressional veto of a pro-
posed CIA action in advance, it consti-
tutes a significant step toward effective
congressional oversight of the CIA.
Finally, this legislation tightens up
several loopholes in the Foreign Assist-
ance Act of 1961 which have enabled the
executive branch to circumvent the
intent of Congress. Military goods cate-
gorized as "excess" by the Defense De-
partment can no longer be given away
without limitation by the President at
his discretion. Rather, the value of such
goods must be calculated and counted
against the amount of military aid for a
designated country appropriated by
Congress. In addition, the bill restricts
the President's power to reallocate funds
from economic to military aid and to
transfer funds earmarked for one coun-
try to a different country at his discre-
tion. All of these provisions serve to
Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0
 H 11786
Approved.For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0
CONGRESSIONAL RECORD -- HOUSE December .12, 197f
enhance congressional control of the
foreign aid program.
CONCLUSION
The Foreign Assistance Act passed by
the House yesterday is far from a per-
fect piece of legislation. I remain deeply
troubled over hundreds of millions of
dollars which will help more than 30
tyrannical governments continue to sub-
jugate their people. But I believe that
the positive attributes of this legislation
outweigh that serious drawback. More-
over, the bill takes important steps
toward reducing our support of govern-
ments inimical to our own principles of
free expression and self-government.
Finally, the alternative to the new For-
eign Assistance Act of 1974, a continuing
resolution which would maintain all aid
programs at their current levels, would
contain fewer limitations on aid to Cam-
bodia, South Korea, and Turkey, and
would include none of the important re-
form provisions of H.R. 17234 described
above, For all of these reasons, I cast my
vote in favor of the Foreign Assistance
Act of 1974 on December 11, 1974.
The SPEAKER (pro tempore). U r
a previous order of the House, tll . en-
tleman from Texas (Mr. GoN z) is
Mr. GONZALEZ. Mr. eaker, come
the stroke of midnig eccmber 31, the
gold rush of 1974 will-begin, unless Con-
gress changes the law with respect to
private gold hoarding.
The Treasury says that this is possible
because gold has nothing to do with the
monetary system any more. Maybe so.
But the chairman of the Federal Reserve
Board tells us that gold is still very much
a part of the international monetary
scene. The fact is that despite Secretary
Simon's protestations to the contrary, the
place of gold in the monetary world is
still very much open to question. It might
not be an active element-but it is still
there, a question mark.
The Treasury insists that selling off
some of the Treasury gold stock will con-
vince the world that gold is a useless
relic, as far as money goes, and that in-
deed, it is just another commodity. But
he knows that this is not so. It will be a
long time before the role of gold ends
in monetary systems. It may be vestigial,
like the human appendix-but it is there,
nevertheless. And like the human ap-
pendix gold can still cause the best laid
plans to go astray.
It is possible that contrary to Mr. Si-
mon's belief, the Treasury gold sale wil
not convince people that gold has noth-
ing to do with money. It may have the
opposite effect. And certainly the con-
servative Swiss are in no hurry to open
up their vaults and sell gold to the pub-
lic--,nor the Germans, nor the Russians,
nor the French. Not even South Africa,
which is swimming in gold, is about to
auction off any bullion.
The truth of the matter is that Secre-
tary Simon needs something to feed the
gold bugs, and Treasury gold is about the
only thing there is to do it with, without
turning to foreign markets, which is
something that we can ill afford to do
these days. So ironically enough, the
gold bugs will soon be munching away at
what they like to think of as the Nation's
monetary lifeblood.
So be it. The Treasury will make a few
hundred million dollars off the deal, and
save our balance of payments a good
amount of unfavorable treatment. But
the truth is that the Treasury cannot sell
vet' much of its gold-not because they
would not like to-but because in truth,
gold is still hanging around in the mone-
tary system, and is not a surplus coln-
motlity.
Into this paradoxical world of gold
will enter thousands of people who be-
lieve in the religion of gold. And they will
buy. The trouble is that many of them
will buy in blind faith.
You know, in the old days when gold
coins circulated, people who accepted
gold c ns would test them, to be sure
that t coins were real. But in. the mod-
ern t; d market, many innocent sheep
will rget to bite their coins, and they
wi ive to be sorry.
haves in gold. But many of these huck-
ster,s are going to be selling lead; many
are 4 Ding to be selling 14 karat gold and
calling it pure; and many are going to
be selling old-fashioned hot air. All of
this has happened already in. the coin
market, which is deluged with counter-
feit and fakes.And gold bullion is much
easier to counterfeit or adulterate than
coins ever were.
The commissioner of corporations in
the State of California has dealt with
gold bugs and gold buggery as much as
anyone else in the country. In his State,
the -Din market, runs into the billions of
doll irs. In that market, just about; every
kind of fraud imaginable to the mind of
man exists. There are simple problems
like price gouging-and there are out-
right criminal schemes.
The California Commissioner of Cor-
pore t ions knows the kind of dangers Ul at
exist for the un's'ary in the gold market.
He has investigated dozens of cases. And.
he joins me in calling for a delay in the
Legalization of private hoarding. Here is
what he says :
DEPARTMENT OF COR!'ORATIONC,
Los Anrceies, Calif., December 4, 1974.
Re: Gold Ownership.
Hon. IENRY B. G`ONZALEZ,
Representative from Texas, House Office
Building, Washington, D.C.
Ds:sR MR. GONzALEZ: I read with interest
the newspaper article relating to your legis-
lative efforts to delay the repeal of the gold
ownership ban for six months.
I ;;I, are your concern about ending the ban
without prior adequate controls over the new
gold market.
The California Commodity Law became
effective in September of 1973. This state leg-
islation was adopted in an effort to control
the sale of commodity options on unreg-
ulated commodities, as well as, to require
companies engaged in the sale of silver or
gold coins, or silver bullion to become It-
censed in California unless exempt. The ma-
jor regulatory problems the Department has
experienced under the state commodity law
are problems relating to the sale of gold and
silver coins and silver bullion. We have ex-
perienced situations in which the sellers of
precious metals purported to sell metals to
market in a short position. We have had oth
instances of dealers taking money far prese
delivery of precious metals and then usirj
never being able to perform their contract
tual commitments.
We have had numerous complaints relat-
ing to abuses in the pricing mechanisms used`
by dealers in selling coins and bullion where
the .prices charged above spot were so hi_;h
as to effectively inhibit any profit accruing to
a customer absent a major shift in the
price of the commodity. The scare tactics
used by people in this industry in relation
to promoting a depression syndrome, and
discounting the stability of the United
States currency has led to issuance of orders
prohibiting misleading advertisting. We have
received a large number of customers' com-
plaints whose position on future delivery
contracts was subsequently wiped out by
margin calls where they were without ade-
quate funds to meet those margin calls be-
cause of overextending themselves. We have
issued numbers of desist and refrain orders
to companies who were operating in noncom-
pliance with the state commodity law.
There are, of course, significant considera-
tions that a person should weigh before he
decides to invest in precious metals, such as
gold, in lieu of investments where there is
interest income on their savings.
The multitude of problems we have expe-
rienced in the area of precious metals has .led
to almost a constant revision of the regula-
tions adopted under the California Co:.n-
modity Law so as to effectively deal with the
problems in the area and to attempt to give
reasonable assurance as to the ability of
sellers of precious metals to deliver the com-
modity the customer has purchased.
The danger to the investing public in ti is
area is such that I believe that it is an ab-
solute necessity to-have the power to regu-
late this market effectively implemented
prior to the time that public ownership of
gold becomes a reality.
Yours very truly,
RoBER'r L. TOMS,
Commissioner of Corporations.
Mr. Speaker, we have a duty to do. We
have a duty to protect innocent 1ple.
We have a duty to protect our economy---
our economy does not need strains on
its balance of payments; our economy
does not need people taking out funds
to put into useless gold schemes. We need
to use our money to build up the coun-
try's productive capacity, not to gamble
away in a market 'that is controlled by
foreign governments and a few shrewd
big dealers.
There is no need to rush into this gold
business. We can wait, long enough to
explore the problems, and deal with them
now, rather than later. Congress has be n
careless. Everybody will pay the price of
that carelessness, unless we act to delay
the legalization of private gold hoarding.
DEFEAT OF TAX BILL BY
. COMMITTEE ON RULES
The SPEAKER pro tempore. Under a
previous order of the House, the gentle-
man from Illinois (Mr. MURPHY) is
recognized for 5 minutes.
Mr. MURPHY of Illinois. Mr. Speaker,
as a Member of the House Rules Com-
mittee I was deeply disappointed and
shocked that the committee failed to re-
port out the Energy Tax and Individual
Relief Act, H.R. 17488. The committee
voted 9 to 4 to defeat this tax bill because
. Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0
 F ( 3~1 RE~t t~R~~~9b ~f 4A1 Q Q,app 7-0
ecember gtpp"41
FOREIGN ASSISTANCE ACT OF 5974 Mr. HAMILTON. I yield to the gentle-
-MON. LEE H. HAMILTON
VF INDIANA
man, I too would like to rise in opposi-
tion to this amendment, and to remind
my colleagues that India has about 600
million people. Its per capita income is
about $100 or $102.
The assistance, if it is to be provided-
and I hope it will-is very modest for a
country of that size. It is being used pri-
marily for food and nutrition. If there
is a likelihood of famine in any country,
I would guess that it would be India.
It seems to me that for humanitarian
reasons alone it would be very wise to
provide this assistance. I think also that
the political relationship has improved
yery definitely, and it would be a signal
that we would like to continue on that
Thursday, December 12, 1974
the House in Committee of the Whole
Fuse on the State of the Union had under
consideration the bill (H.R. 17234) to amend
the Foreign Assistance Act of 1961, and for
4l7er ,purp oses.
'Mr. HAMILTON. Mr. Chairman, the
amendment of the, gentleman from Iowa
st ikes out air funds in the bill for India.
The executive branch had recommended
a figure of $75 million for India and the
committee recommends $50 million.
,I ann rising in opposition to the
amendment and I hope very much that
the House will not see fit to cut out all
funds for India. We have been laying
the,groundwork for a more mature rela-
tionshlp and, a new economic relation-
ship with India in recent years. It would
serve no useful purpose at this time to
cut the limited number of dollars that
we have in this bill for India. India is
thelargest,and the most powerful nation
in the subcontinent and also happens to
be the largest democracy in the world.
or the United States at this point to
cut off all :aid to India would not affect
India's nuclear program in any way and
it would serve no real useful purpose.
Beyond that, we lose any leverage that
we might have with' India in trying to
help her to restrain development of
nuclear weapons.
There has been no significant transfer
'of economic resources by India from
domestic purposes to nuclear explosions.
India has an overall budget of, about $60
billion and the total cost of the nuclear
explosion was about $10 million. That is
about one-tenth of 1 percent of India's
I think a move by the Congress to cut
off all aid to India would have an adverse
effect on our relationship with India,
and I strongly urge my colleagues to
disapprove of this amendment.
Mr. FINDLEY. Mr., Chairman, will the
gentleman yield?
Mr. HAMILTON. I yield to the gentle-
man from Illinois.
Mr. FINDLEY.. Mr. Chairman, I want
to thank the gentleman for his com-
ments. I share his view grid I hope the
committee will support the emolument
as Provided in the bill. India is not only
the largest democracy in the world-that
statement is an accurate one-but it also
happens to be one of the few surviving
democracies in that region of the world.
I think, it would be a* serious mistake
,or, us to,lose the,leverage we do have,by
moa S bT, this money and to turn our
bacck on same very essential investments
:that the taxpayers of this Nation have
made in. India over the years. To close
the door on communications by means
.of this.3rogram at this juncture, I think,
wolfed be very imprudent.
C.IW'1 SEN. _Mr. Chair-
t44, 111 the gentleman yield?
The Prime Minister of India has made it
very clear that her country needs this
course.
Mr. S Y MMS. Mr. Chairman, will the
gentleman yield?
Mr. HAMILTON. I.yield to the gentle-
man from Idaho.
Mr. SYMMS. Mr. Chairman, I would
like to ask a question, The gentleman
from Iowa who offered this amendment
talked about saving cattle. Can the gen-
tleman tell me the number of cattle in
India?
Mr. HAMILTON. I am afraid I cannot
give the gentleman the number of cattle
in India today.
Mr. SYMMS. From the information I
have, they have somewhere around 3D
million head of cattle in India. We should
try to make better utilization of those
cattle. Do we have any inhibitions in that
area?
Mr. HAMILTON. No, we do not have
inhibitions, but India does. This is a
modest amount we are providing for
India in the bill. It is only $50 million and
it is directed. at precisely the right area
of the Indian. economy, which is to in-
crease food production. We cannot
change their religious standards and
mores.
Mr. SYMMS. If the gentleman will
yield further, I will say that in 'Indiana
1$50 million would be a modest amount,
but in Iowa $50 million will go a long
ways, and we do not have sacred cows,
sacred monkeys, and sacred rats.
Mr. HAMILTON. The United States
has a strong interest in peace, stability,
and economic development in the sub-
continent. We have had enough experi-
ence with the underdeveloped countries
to know that whenever instability arises
in any part of the world, the United
States is brought into it. We are simply
signaling India by these limited funds
that we are interested in its problems and
we want to help them out, and we stand
with them in their desire for economic
development.
Mr. BUCHANAN. Mr. Chairman, will
the gentleman yield?
Mr. HAMILTON. I yield to the gentle-
man from Alabama.
Mr. BUCHANAN. Mr. Chairman, I
thank the gentleman for yielding to me.
I think. the gentleman from Indiana
made a. good case against this amend-
ment, and I would like to associate my-
self with him.
arrived in Moscow.
the Americans spread out over the
Approved For Release 2005/06/16: CIA-RDP79-00957A000100020017-0
E~ 7095
SON. EDWARD J. DERWINSKI
- OF ILLINOIS
IN THE HOUSE OF REPRESENTATIVES
Thursday, December 12, 1974
Mr. DERWINSKI. Mr. Speaker, the
perspective section of the Chicago Trib-
une on Monday, December 9, carried an
article entitled, "Mission of Mercy For-
gotten," by Henry C. Wolfe, who served
on the American Relief Administration
mission to the Soviet Union in 1921.
I believe this article to be totally ac-
curate, objective and a historic summary
which is extremely pertinent in light
of today's international situation.
I do not believe that we can actually
think that detente with the Soviet
Union has come about as a result of a
sudden change of foreign policy goals.
We face a great danger by being lulled
into a false feeling of security to the
propaganda use of-the so-called period
of detente.
Anyone who takes a good look at the
situations in Cambodia, South Vietnam,
South Korea, and the Middle East would
have to wonder if Secretary Kissinger is
inhabiting another glow as he flits about
repeating the cliches of detente.
The article follows:
NONIIAPPENING IN RUssIA: MISSION OF
MERCY FORGOTTEN
Alexander Solzhenitsyn is a towering world
figure, both as a writer and as a man. His
courage and honesty are widely recognized.
In "The Gulag Archipelago" he describes
the catastrophic famine of 1921-22 as "such
a famine as even Russia had never known
before . . ." when "parents ate their own
children. " He says nothing, however,
about the American Relief Administration
(ARA) that stopped the famine and ended
the concomitant epidemics.
Why did so honest and well-informed a
man fail to mention the ARA? The probable
answer is that he knows nothing about the
ARA and its work.
The Kremlin, he points out, gives the
famine "only two lines in the official 'his-
tories." Moreover,, he was an Infant when
the ARA finished its mercy mission in Russia.
Today, in all likelihood, only a few of the
older Russians would remember the work
of the ARA. It is probable that even fewer
Americans do.
Yet Sir Philip Gibbs, an on-the-spot ob-
server, wrote of the ARA's work: "History
will record it as the greatest campaign of
relief and International charity ever at-
tempted or achieved." This is the story.
In 1921 the ARA was headed by Herbert
Hoover, then secretary of Commerce. Since
World War I, the organization, supported by
large numbers of individual contributions,
had been feeding millions of children in
Europe. Its sole objective was to save lives
and relieve suffering. Hoover's proffers of aid
to Russian children had been rebuffed.
On July 23, 1921, a dramatic call for help
appeared in the world press. Maxim Gorky,
speaking for the Soviet government, revealed
the starvation that was rampant among the
Russ! s. "I ask all honest European and
alk, America people for prompt aid to the Rus-
sian peo e. Send bread and medicine."
That y Hoover cabled an offer of help,
and q ly sent representatives to meet with
a So delegation in Riga. An agreement
 I s /16 IA-RDP79 0 957, 001 0
E 7096 g t~~ Extensions o) mar s r 12, 1974
famine area, they found the dying and dead
everywhere. Famished dogs foht over half-
eaten corpses. There was canni lisxn. Hordes
of panic-stricken peasants fled it doomed
villages to die in the hungry c ies. With
them traveled typhoid, cholera, sma ox, and
in reaching the famine victims thk ARA
encountered immense problems. The dr ded
black-earth. Volga region where the famin
was most devastating.
At peak the ARA distributed daily food
rations to 4,173,339 children and 6,317,958
adults. Additionally, the Russians received
1,300 complete surgical operating sets, 377
kinds of medicines, enormous quantities of
soap, blankets, clothes, disinfectants, and
cod-liver oil.
Speaking at the Kremlin's farewell banquet
given in July, 1923, for the ARA staff, Lev
Kamenev paid tribute to the "utterly un-
selfish efforts of the ARA." He declared that
the ARA had saved millions of lives, "entire
districts and even cities."
The Russian people, he pledged, "will never
forget the help given them by the American
people."
Stalin and his successors have made sure
that the Russian people have never heard
of that help. This experience may have a
bearing on how much faith we can put In
detente.
IN OPPOSITION TO S. 1868, TO
AMEj11D THE UNITED NATIONS
PARTICIPATION ACT TO HALT
THE IMPORTATION OF RHODE-
SIAN CHROME
HON. WILLIAM H. HUDNUT III
OF INDIANA
IN THE HOUSE OF REPRESENTATIVES
Thursday, December 12, 1974
Mr. HUDNUT. Mr. Speaker, the bill, S.
1868, which would once again stop the
importation of Rhodesian chrome into
the United States, is on the House cal-
endar and may be considered this week.
I am strongly opposed to this legislation
and hope it will be defeated.
In these inflationary times there is no
satisfactory reason for arbitrarily re-
ducing the supply available to the U.S.
consumer of an important industrial raw
material-particularly since the main
beneficiary of this act would be the So-
viet Union. During the sanctions against
Rhodesia the Soviet Union was our prin-
cipal source of high quality chromite. It
took advantage of our dependence upon
it in two respects: First, the quality of
the ore exported to the United States
steadily deteriorated; and second, Rus-
sian prices drastically increased. From
$35.75 per short ton in 1965 the price
steadily increased to $68.45 in 1972 and
then fell back to $51.73 per ton in 1973
when sanctions were lifted.
American consumers have a greater
interest than ever in the continued avail-
ability of chrome. For instance, in order
to meet air quality standards, new auto-
mobiles use catalytic converters made of
stainless steel of which chrome is a basic
ingredient. Rhodesia is a country which
poses no threat-real or potential-to
our security. On the other hand, the So-
viet Union is a potential adversary. At
the beginning of the Korean war, the
Soviets cut off shipments of chrome to us.
Obviously it is unwise to rely upon
sources in the Soviet Union in any
period of crisis.
Therefore, from both an economic and
security standpoint, the passage of S.
1868 would be very unwise.
THE FOREIGN INFLUENCE AND
OUR BOOKS
HON. JOSEPH M. GAYDOS
OF P]INNSYLVANIA
V THE HOUSE OF REPRESENTATIVES
?,;Thursday, December 12, 1974
Mr: \nnwhich S. Mr. Speaker, the marked
influethe book publisher has
on thmind stems, as all those ac-
quainthe business agree, from
two sFirst, he selects the books,
to be d, and second, he promotes
It may be i lie interest of the Nation
to keep these tiers in mind as we as-
sess the latest 'or development iiin the
book trade. It is t ' agreement by Amer-
ican Financial C C. of Cincinnati to
sell Bantam Books, c. to a Luxembourg
holding company ociated with the
mighty Fiat interest `.'n Western Eu-
rope. The deal is to completed on
Bantam happens to bee of the big-
gest paperback publishers our coun-
try, the source of millio9 f volumes
which find their way onto wss-Lands,
into homes and libraries,. and 1o school
classrooms where they have a remen-
This agreed upon sale, they fore,
means that these millions of boo no
natter what changes or lack of ch.a es
I, as a Congressman, cannot let this
happen without bringing to attention
these facts, and, also, the danger to us
as a nation which could me involved in
them. The Bantam sale will turnover to
the Western European owners an instru-
ment of great force in the producing of
the ongoing American public opinion.
Can Bantam, therefore, be relied upon,
under alien ownership, to pick and push
books written exclusively in the U.S. in-
terest? Will it lend its immense power
to pro-American causes inimical to what
may be the advantage held by its new
overseas proprietors? What effect on once
independent American thought may the
Fiat people and the publishing decisions
they dictate come to have in the years
ahead? I consider these questions war-
ranting our consideration,.
I am aware of the internationalism
which has prevailed for some time in the
publishing business=how American-
published books have wide distribution
in Europe and, in fact, all over the world
and how foreign. books are sold in trans-
lation in large numbers here. But this
certainly is a matter far different from
that created by the Bantam sale, which
has a foreign ownership moving directly
into the American publishing industry,
taking over a major source of informa-
tion to the reading public.
PROPOSES EXPANSION FOR
MAILING PRIVILEGES
OF MICHIGAN
IN THE HOUSE OF REPRESENTATIVES
Thursday, December 12, 1974
Mr. FORD. Mr. Speaker, I am intro-
ducing legislation today to extend pre-
ferred second-class postal rates to con-
servation magazines published by State
agencies. This legislation would merely
extend the same mailing privileges to
State conservation agencies which are
presently available to other State agen-
cies.
Since postal legislation in this area was
last considered by Congress, there has
occured a dramatic surge of popular con-
cern for and interest in the quality of the
environment, conservation of fish and
wildlife, and appreciation of our natural
resources. These popular attitudes have
been Teflected also in the significant in-
crease of interest in outdoor recreation
including hunting, fishing, backpacking,
and. nature study.
Forty-three State conservation agen-
cies now publish magazines which reflect
and nurture this interest. These publica-
tions play a key role in educating citizens
to the conservation ethic.
Mr. Speaker, under existing law, State
conservation magazines are mailed at
the same rate utilized by commercial
magazines. Unlike their commercial
counterparts, however, these magazines
are., almost without exception, published
without the benefit of advertising reve-
nue, and the burden of postage consti-
tutes a drain on the fish and game fund
which represents revenues available from
hunter's and angler's license sales.
In 1951 Congress extended preferred
rates for certain second-class and third-
class mail when mailed by qualified non-
Fr
lished by t
a State."
Again, in 1
definition of
nization" to
Congress amended the defini-
All-my legislation proposes to do is to
amend the definite of "qualified non-
profit organization - to include "one con-
servation publicati published by an
agency of a State ich is responsible
for management and onservation of the
fish or wildlife resoures of such State."
Mr. Speaker, the inr~ceased national
interest in fish and wildife conservation
is extremely gratifying.\, At the same
time, however, it has genei~ated demands
on State agencies to moilnt new pro-
grams aimed at restoring threatened and
endangered species as well as develop-
ing conservation programs for nongame
icultural, labor, veterans or fraternal
anizations not organized for profit."
the outset the Post Office Depart-
interpreted this provision as not
. Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0