CONGRESSSIONAL RECORD - SENATE-REGARDING VARIOUS FOREIGN AID PROGRAMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000300010029-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 36
• Document Creation Date: December 16, 2016
• Document Release Date: January 5, 2004
• Sequence Number: 29
• Publication Date: January 1, 1958
• Content Type: OPEN

M
amount. The effect, however, on others r.
of thus recognizing the ' full effort they current and growing critical problem of tee Qn May 26, so I asume they are cor-
are making would, I believe, be substan- airspace in the Washington area em- rect-at least accurate enough to indi-
tial in stimulating and encouraging even phasizes the immediate and urgent need cate the magnitude of the problem.
greater endeavors. For these reasons, to do something about it now, and not in Today, I asked Gen. E. R. Quesada,
I hope the House provisions on both these the distant or indefinite future. Special Assistant to the President, Chair-
points will prevail. The Subcommitee on Military Con- man of the Airways Modernization
Mr. JAVITS. Mr. President, I wish struction, of which I-'am the chairman, Board, and Chairman of the Air Coordi-
t4 associate myself with the remarks has the main responsibility for recom- nating Committee, to appear before the
made, by the Senator from New Jersey mending the authorizations which are subcommittee and discuss the problem.
in calling to the attention of the con- essential for the establishment of mili- We found General Quesada highly in-
ferees on the part of the Senate the tary installations, including airbases. formed on the subject and most co-
.very great _contribution which can be Currently we are considering . 3756, operative. We indicated to General
-made by the United Nations Special the fiscal year 1959 military construction Queasada t1 t we wa tnted he n interimot
pera m,
1958 Approved- For &A1AV 99P1RBo0300010029-6 9353
STENNIS Mr President the rectly from testimony given the commit-
Projects Fund as part of the U. N. Ex-
panded Technical Assistance Program
as dealt with in section 7 (b) of the bill
which, in the version of the bill which
is before the Senate, differs from the cor-
responding provision in the version of
the bill which was passed by the House
of Representatives.
As my colleague has explained, if the
provision which is to be found in the
Version of the bill before the Senate is
retained, then the percentage our coun-
try can contribute :will -decline to 38 per-
amount of approximately $18 million,
and one close to $20 million for the Air
Force. These authorizations if ap-
proved are to be utilized in the expansion
of Andrews Air Force Base and jhe John
Tower Air Facility located at 'Andrews.
The services have indicat `that they
propose eventually to mov their flying
operations from Bolling And Anacostia
For some time I hav -been gravely con-
cerned about the prlems arising from
e has fixed the per- the multiple utiliotion of airspace by
}'iosed, in the Unite
C[al United Nations
j7evelopment, which 1
'because, in substance,
i rs., b11ao, ; u w uv u?... ..+~ .....
hinder the development o underdevel- longer approve the establishment or ex-
tped areas, 'because both t y and we pansion of military air facilities in heav-
ould be biting off far mor than we ily/populated centers without covering
ould chew or digest and becau there thoroughly the airspace problem.
Was no guar` anty whatever th the A few days ago we took preliminary
program would ,be adequately find ed; testimony from Navy and Air Force wit-
Nevertheless, Mr. President, the u - neses concerning their plans to move
derdevelopec areas have backed SUNF air operations from Bolling and Ana-
very's rorig'Iy and the only mean by Ostia. At that time the witnesses indi-
hich' we, in_ cooperation with,/other c ted that they proposed to move as soon
,Ihave been able to holdff the as he construction of adequate facili-
ti
r
ons
ia
establishment of SUNFED which we ties t Andrews were completed. One
considered unwise `at this tinrlif has been witne indicated that such a move
by means of the astoundingly able Job might e\as late as the first quarter of
' etrarght technical assistance and more enoug . to weigh.
extensive development, by providing for We all understan that the services t, we look for-ward with
planning for projects and for institutes have many military re irements con- Me great Mr. interest Presidsident, we report rn 10 with
in which people canbe taught how to ad- stituting the operation of ircraft in the to his days'
but T hav - rnme to the time.
which has been done by Congressman rue caie uar yeah laud -- ~.---- ments be made to lessen the area's air
Juno in the U. N. Genefal Assembly's and the ATS terminal at National traffic-even if that requires the trans -
:'last session' in getting adopted the reso- Airport wo cease to be used. The ear- ortic-e of pilots to other fields, such
Jution for the Special Projects Fund. liest possible to mentioned in the testi- as Patuxent or Norfolk, for their pro-
Iv r. President, this Special Projects mony was some 'me late in 1960. I can- ficiency flying. This was one of the
Fund, will constitute the link between not help feeling at this is not early
h main items we asked General Quesada
nnancea. it we Ian bu gu aluisa w--- u.. vvaia auo?v ~??w~ ?~ --------
resentatives we will be quirements some additional vig ous and
f Re
s
p
e o
Hou
"gielding' the benefit of an important gain prompt action must be taken immedi-
for our point of view made in the U. N. ately to ease the situation, even if it
For these reasons, I think the course means that on a temporary basis we must
of greatest economy and greatest effi- find substitute solutions to meet the re-
ciency is for the Senate to join the House quirements of the military.
of Representatives in favoring the Pro- In 1957, there were 280,000 flights from
700 were
of which 7
i
t
,
rpor
,
visiens which have been voted by the National A
douse of Representatives; and I com- MATS aircraft. At Bolling there were
I'mend'that course very strongly to the 42,000; at Anacostia, 72,000. Andrews
Co3lereesyon the part of the Senate. also was ma busy airport with 222,000
L__ .Y,.t.,... - f.,+ol of ahmlf.
t~VA G1'619 ARE - ~ AIRSPACE
' I'Ftb LEM
' the Senator from California yield to me?
Mr. KNbW1;AND. I yield.
626,000 aircraft operations in the wasn-
ington area annually of which, if these
figures taken from the testimony are
correct, only a litle more than 270,000
were civilian. These figures sound fan-
tastically high; but they are taken di-
out also a perinallellb idle NLCUavaocu vaa
long-range planning.
I suggested to General Quesada that
he check with the services involved, and
review the possibility of immediately
moving certain of the proficiency and
other military flying operations from the
Washington area to outlying areas, even
if such required conditions which would
not. be considered satisfactory to meet
all military requirements over a long pe-
riod of time. General Quesada readily'
agreed to make such an investigation,
and promised to give the Committee a
report within the next 10 days.
Mr. President, it becomes increasingly
obvious that we must soon find a definite
solution to the airspace congestion
which in the past few months has re-
sulted in so many tragic fatalities. I
cannot help but feel that many of those
disasters could have been avoided
through long-range planning. It seems
clear that we must move as many of these
flying activities as possible away from
our cities and congested areas, in accord-
ance with a master plan. I .Make these
remarks both to emphasize the problem
once more and to indicate that some-
thing should be done about it. I call on
the Secretary of Defense and the Secre-
taries of the Army, Navy, and Air Force
to give every cooperation to General
Quesada in his survey, and to move with
PROGRAM OF GRANTS-IN-AID TO
REPUBLIC OF THE PHILIPPINES
FOR HOSPITALIZATION OF CER-
TAIN VETERANS -
Mr. JOHNSON of Texas. Mr. Presi-
dent, I ask that the Chair lay before the
Senate a message from the House in
connection with House bill 6908, a bill to
authorize modification and extension of
the program of grants-in-aid to the Re-
public of the Philippines for the hos-
pitalization of certain veterans, and for
other purposes.
The PRESIDING OFFICER laid be-
fore the Senate a message from the
House of Representatives p,nnouncing its
action on certain amendments of the
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try. I feel strongly, and I
other committee members
 9354 Approved For / ~.pP91pp~g5 R000300010029-6
c, ~ "
f Iii'3Ri;`C:t~1~ffi SENATE June
Senate to House bill 6908, which was considerable discussion. It reads as communism wherever it exists. It is a
read as follows: follows: menacing international conspiracy. For
IN THE HOUSE OF REPRESENTATIVES, U. S., Such regulations shall prohibit the return that reason I propose shutting off any
May 28,1958. to the United States for sale in the United future aid to Yugoslavia and Poland.
-Resolved, That the House agree to the States, other than for the Armed Forces of Mr. President, I could discuss the
amendments of the Senate numbered 1. 2. 4. the United States nnA it
nni
__
s
mill
of
%u. n. vwoT 01161b1eu nn act to authorize
modification and extension of the program
of grants-in-aid to the Republic of the Phil-
ippines for the hospitalization of certain
veterans, to restore eligibility for hospital
and medical care to certain veterans of the
Armed Forces of the United States residing in
the Philippines, and for other purposes" and
concur therein; and
That the House disagree to the amend-
ment,of the Senate numbered 3.
Mr. JOHNSON of Texas. Mr. Presi-
dent, the House has agreed to all Senate
amendments to this bill but one. That
amendment deals with eligibility stand-
ards of veterans.
With the approval of the minority
leader, and the chairman and ranking
member of the Committee on
bor EGIabor and Public Welfare, I now move
that the Senate recede from its amend-
ment numbered 3.
ion was agreed to.
MUTUAL SECURITY ACT OF 1958'
The Senate resumed the consideration
of the bill (H. R. 12181) to amend fur-
ther the Mutual Security Act of 1954,
as amended, and for other purposes.
Mr. KNOWLAND. Mr. President, I
send to the desk an amendment, and ask
that it be read for the information of
the Senate.
The PRESIDING OFFICER. The
clerk will state the amendment.
The LEGISLATIVE CLERK. It is pro-
posed, on page 48, line 4, before the
comma, 'to insert the words: "furnished
to foreign governments by the United
States under this act or any other for-
eign assistance program of the United
States."
Mr. KNOWLAND. Mr. President, my
amendment is not printed, but it is very
brief, and I shall read it in order that
Senators may follow it.
On page 48, line 4, before the comma,
it is proposed to insert the words: "fur-
nished to foreign governments by the
United States under this act or any other
foreign assistance program of the United
States."
The background of this amendment is
that in the House the committee had in-
serted certain language in the bill.
When it reached the floor the so-called
Sikes amendment was adopted, reading
as follows:
Such regulations shall prohibit the re-
turn to the United States (other than for
the Armed Forces of the United States and
its allies) of any military arms or ammuni-
tion furnished to foreign governments by
the United States under this act or any other
foreign assistance program of the United
States,
When the bill came before the Com-
mittee on Foreign Relations there was a
considrable amount of discussion. The
distinguished Senator from Massachu-
setts [Mr. KENNEDY] offered some lan-
guage which was finally included, after
proved in condition in foreign countries. Know the story. I rest my case there.
This prohibition shall not extend to small Mr. President, I ask unanimous con-
arms and ammunition which have been sent to have printed in the RECORD at this
changed and so substantially transformed point as a part of my remarks a state-
as to become articles of foreign manufacture. - ment which I have prepared on this sub-
This amendment comes at the end of ject,
section 414 (b), and it relates to muni-
tions control.
I think it is fair to say that most Mem-
bers of the committee were very much
impressed by the arguments of the Sena-
tor from Massachusetts in relation to
any arms which had been furnished
under the Mutual Aid Act or any of its
predecessors.
There was considerable sentiment in
the committee-though it does not fin-
ally reveal itself in the language which
was reported to the Senate-to the effect
that in dealing with other arms we were
dealing with a subject which should
come before the Senate Finance Com-
mittee or other appropriate committee of
the Senate dealing with foreign trade.
It was felt that it was not a matter which
should be dealt with in connection with
the mutual-aid program.
I should like to address an inquiry to
the distinguished chairman of the com-
mittee, the Senator from Rhode Island
[Mr. GREEN], to see whether, under the
circumstances, he could accept the
amendment and take it ? to conference.
Mr. GREEN. I shall be glad, on be-
half of the committee, to take the
amendment to conference.
The PRESIDING OFFICER. The
question is on agreeing to the amend- UN resolution condemning the Soviet Union
ment offered by the Senator from Cali- for its action against the Hungarian people
fornia CMr. KNOwLAND1. In the freedom revolt.
The amendment was agreed to. Poland voted against a resolution urging
Mr. BRIDGES. Mr. President, I offer admission of South Korea to the United
the amendment which I send to the desk Nations. Yugoslavia abstained.
Poland voted against a U. N. resolution
and ask to have stated. urging unification of Korea. Yugoslavia
The PRESIDING OFFICER. The abstained.
amendment offered by the Senator from Yugoslavia formally recognized Commu-
New Hampshire will be stated. nist East Germany. Poland has had diplo-
The CHIEF CLERK. On page 35, line matic relations with East Germany since the
3, immediately after "SEC. 5." it is pro- latter government was set up.
posed to insert "(a) ". Poland attended the Russian 40th anni-
versary celebration in Moscow last Novem-
On page 35, between lines 12 and 13, ber. Tito did not, but he called for full
it is proposed to insert the following ' unity of all socialist meaning Communist
new subsection: forces.
(b) Section 143 of the Mutual Security Nevertheless in less than a year, the
Act of 1964, as amended (which relates to United States had extended $193 million in
assistance to Yugoslavia), is amended to aid to Poland.
read as follows: And Yugoslavia continues to receive
SEC. 143. Prohibition of assistance to American assistance.
Yugoslavia and Poland: Notwithstanding any there are some people who sincerely con-
other provision of law, no assistance shall tend that Tito's brand of communism is
be furnished under this act to Yugoslavia or not the dangerous brand of communism
Poland after the expiration of 60 days follow- that Khrushchev's is.
ctomulka government represents a move for
Mr. BRIDGES. Mr. President, this is Polish independence from Moscow.
a very simple amendment. I do notsee I should like to remind the Members of
any reason for a great deal of discussion the Senate and the people of the United
of it. Members of this body know States of statements made by both Tito and
whether they approve or do not approve Tito and Gomulka that clearly and firmly show that
rolling out the red carpet and strength- Tito aGomulka are dyed-in.?the-wool
Communists and that they do not consider
ening Communist governments such as there is any such thing as national com-
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ment was ordered to be printed in the
RECORD, as follows:
STATEMENT BY SENATOR BRIDGES
The Congress of the United States is once
again faced with the question of foreign-aid
policies and programs.
Since adjournment last August, a number
of events directly bearing on this question
have occurred. Those relating to Yugoslavia
and Poland are the concern of my remarks at
this time.
As I understand State Department policy,
it is to grant aid to Yugoslavia and Poland as
a calculated gamble, hoping those govern-
ments will assert independence from the
U. S. S: R. The administration contends it
is to our best interest to encourage national
communism which would thereby crack the
solid wall of the Soviet bloc.
Events of the past few months hardly en-
dorse this reasoning. On the contrary only
last November Tito called it a "stupidity" to
assert either tugoslavia or Poland was cul-
tivating national communism. He said they
are not.
Gomulka has called for greater ties with
the Soviet and signed the November Com-
munist communique which reaflrmed the
international nature of the Communist
movement.
Poland voted more often against the United
States position in the session of the UN Gen-
eral Assembly last fall than Russia did.
 1958
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I have in my hand a pamphlet prepared
by the Legislative Reference Service of the
Library of Congress at the direction of the
Souse Un-American Activities Committee.
This pamphlet gives historical data on
Tito and on Gomulka. It is dated October
11,' 1957, and so is fairly up to date.
The very first sentence regarding 'Tito
,quotes the dictator of Yugoslavia as sum-
ming up'his life in one sentence. Tito de-
clared "I am a Communist and nothing but
a Communist."
If Tito says he is a Communist, we should
take him at his word; and, 1 --might add,
that is one of 'the few statements Tito has
made which I consider reliable.
The House Un-American Activities Cori-
mittee pamphlet continues:
"Tito is a part of the world Communist
movement. The clash with Stalin in 1948,
It is true, forced Tito's reorientation in (or-
eign affairs (reconciliation with Greece, ac-
ceptance of military and economic aid from
the Western Powers, etc.) but in no funda-
'mental way did it alter his political faith.
This dispute with Stalin was primarily a
personal affair, a power struggle between two
dictators, and not a disagreement on the
general tenets of Marxism-Leninism.
"Tito never denied the ' 'validity' and
'truth' of Communist doctrine, but he con-
tested Stalin's right to impinge upon his
own, domain and Stalin's refusal to tolerate
'little Stalins'."
Referring to a 1957 interview, the pam-
phlet states that Tito acknowledged there
was "some difference" between communism
in Yugoslavia and the U. S. S. H. He has-
tened to add that "there are not big, ideo-
logical differences.
He said further, according to the pam-
phlet, that "we have the same aim that is to
say-the building of socialism and com-
munism."
According `to the House Un-American Ac-
tivities Committee pamphlet, Tito and Go-
inulka met in 1967 and reaffirmed their ties
to Moscow without reservation. Here are
the exact words:
"At the end of his recent conferees with
Premier Gomulka of 'Poland, Tito nd the
Polish dictator again reaffirmed their ties to
Moscow without reservation.
"When the United Nations General As-
sembly voted overwhelmingly to condemn
Russia for the bloody reprisals against thfe
Hungarian patriots, both Poland and Yugo-
slavia dutifully voted .against such con-
tiemnAtion; ,
In. gonclusion, the pamphlet declares:
"Before, during, and after World War II,
Tito has invariably' shown himself to be a
dedicated Communist. A powerful ideolog-
ical affinity binds him firmly to his Com-
muliist brethren, : During the fast few years,
In fact, he has clearly moved closer to, a po-
litical alignment with Moscow. Tito's gen-
eral philosophy of life, the nature of his
regime, and his inflexible commitment to
communism all militate against a lasting
rift with the Kremlin."
Now, I should like to react excerpts from
the same pamphlet issued by the House
Un-American Activities Committee regard-
ing Premier Gomulka of Poland. I quote:
"-Gomulka does not have any intention of
abandoning the Communist system; on the
.contrary, while his 'road to socialism' may
differ from the Russian one, it is still a road
to socialism, Although he has made a few
adjustments to the local situation in Po-
land, he insists upon carryingg out the tenets
Marxism-Leninism, a position which sim-
ply means that the problems he faces- will
never be solved as long as he or any other
Communist is in power.
"Gomi lka has made his position abun-
dantly clear. He denies b ing a 'national
Communist,' stating that this concept is an
American invention,
program includes the main aims of every
Communist Party, which he describes as
" (1) , the seizure of power by the Commu-
nists;
"(2) the establishment of a Communist
dictatorship;
"(3) nationalization of industry, collecti-
tivization of agriculture, and the establish-
ment of a planned economy; and
"(4) promotion of international com-
' munism in foreign affairs."
Let us consult Mr. Gomulka's own words.
According to the Un-American Activities
pamphlet I have here, Gomulka has said:
"There are only 2 camps, 2 roads-the road
to socialism represented by the Soviet Union,
and the road to capitalism and imperialism
represented by the United States.
"I realize very well where the future of
the Polish nation and of the Polish working
class lies-it is not with the West."
I call the attention of the Members of the
Senate to this further statement of Gomulka;
"If there is anyone who thinks that it is
possible to kindle anti-Soviet moods in Po-
land, then he is deeply mistaken. No at-
tempt to sow distrust of the Soviet Union
will find a response among the people of Po-
land."
Mr. President, I take these statements at
full face value. I think the American people
should take them at full face value.
We made the great mistake of not taking
Hitler at his word. Let us not make that
mistake again.
Mr. President, I urge adoption of the pend-
ing amendment to deny aid to Yugoslavia
and Poland.
The PRESIDING OFFICER. The
question is on .agreeing to the amend-
ment offered by the Senator from New
Hampshire [Mr. BRIDGES].
Mr. BRIDGES. I ask for the yeas and
nays.
Mr. KNOWLAND. I suggest the -ab-
sence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The Chief Clerk proceeded to call the
roll. .
Mr. BRIDGES. Mr. President, I ask
unanimous consent that the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without
objection, it is so ordered.
The question is on agreeing to the
amendment offered by the Senator from
New Hampshire [Mr. BRIDGES].
Mr. BRIDGES. Mr. President, I ask
for the yeas and nays.
The yeas and nays were ordered, and
the Chief Clerk proceeded to call the roll.
Mr. MCCLELLAN (when his name was
called). On this vote I have a pair with
the distinguished senior Senator from
Florida [Mr. HOLLAND]. If he were pres-
ent and voting, he would vote "nay;" if I.
were permitted to vote I would vote
"yea." I' therefore withhold, rl3 vote.
The rollcall was concluded.
Mr. MANSFIELD. I announce that
the Senator from Virginia [Mr. BYRD],
the Senator from Delaware [Mr. FREAR],
the Senator from Arizona [Mr, HAYDEN],
the Senator from Florida [Mr. HOLLAND],
the Senator from South Carolina [Mr.
JOHNSTON], the Senator from Oklahoma
[Mr. KERR], the Senator from Louisiana
[Mr. LONG], the Senator from Montana
[Mr. MURRAY], the Senator from Wyo-
ming [Mr. O'MAHONEY], the Senator
from Virginia [Mr. ROBERTSON], and the
Senator from Texas [Mr, YARBOROUGH]
are absent on official business.
I further announce that, if present and
voting, the Senator from Virginia [Mf.
BYRD] would vote "yea."
On this vote the Senator from Dela-
ware [Mr. FREAR] is paired with the Sen-
ator from Montana [Mr. MURRAY]. If
present and voting, the Senator from
Delaware [Mr. FREAR] would vote "yea"
and the Senator from Montana [Mr.
MURRAY] would vote "nay."
On this vote the Senator from South
Carolina [Mr. JOHNSTON) is paired with
the Senator from Arizona [Mr. HAYDEN]
If present and voting, the Senator from
South Carolina [Mr. -JOHNSTON] would
vote "yea" and the Senator from Arizona
[Mr. HAYDEN] would vote "nay."
Mr. DIRKSEN. I announce that the
Senator from Wyoming LMr. BARRETT],
the Senator from New York [Mr. IVES],
the Senator from Pennsylvania [Mr.
MARTIN], and the Senator from Kansas
[Mr. SCHOEPPEL] are absent on official
business.
The Senator from New Hampshire
[Mr. COTTON], the Senator from West
Virginia [Mr. REVERCOMS], and the
Senator from Massachusetts [Mr. SAL-
TONSTALL] are necessarily absent.
The Senator from Kentucky [Mr.
COOPER] is detained on official business.
The Senator from Wyoming [Mr. BAR-
RETT] is paired with the Senator from
Kentucky [Mr. COOPER]. If present and
voting, the Senator from Wyoming would
vote "yea" and the-Senator from Ken-
tucky would vote "nay."
The Senator from New Hampshire
[Mr. COTTON] is paired with the Senator
from New York [Mr. IVES]. If present
and voting, the Senator from New Hamp-
shire would vote "yea" and the Senator
from New York would vote "nay."
The Senator from Kansas [Mr.
SCHOEPPEL] is paired with the Senator
from Massachusetts [Mr. SALTONSTALL].
If present and voting, the Senator from
Kansas would vote "yea" and the Senator
from Massachusetts would vote "nay."
The result was announced-yeas 22,
nays 54, as follows:
YEAS-22
Bricker Ervin Russell
Bridges Goldwater Smith, Maine
Butler Hruska Talmadge
Capehart Jenner Thurmond
Chavez Jordan Williams
Curtis Knowland Young
Iiworshak Malone
Eastland Potter
NAYS-54
Aiken Gore McNamara
Allott Green Monroney
Anderson Hennings Morse
Beall Hickenlooper Morton
Bennett Hill Mundt
Bible Hoblitzell Neuberger
Bush Humphrey Pastore
Carlson Jackson Payne
Carroll Javits Proxmire
Case, N. J. Johnson, Tex. Purtell
Case, S. Dak. Kefauver Smothers
Church Kennedy Smith, N. J.
Clark Kuchel Sparkman
Dirksen Langer Stennis.
Douglas Lausche Symington
Ellender Magnuson Thye
Flanders Mansfield Watkins
Fulbright Martin, Iowa Wiley
NOT VOTING-20
Barrett Cotton Holland
Byrd Frear Ives
Cooper Hayden Johnston, S. C.
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 9356 CONGRESSIONAL RECORD -SENATE
Rerr. Murray Saltonstall
Long O'Mahoney Schoeppel
Martin, Pa. A evercomb Yarborough
McClellan Robertson
sp' tr. ERID6ES' amendment was re-
jected.
Mr. ELIENDER Mr. President, I
call up my amendment designated
"6-5-58-1)" and ask that it be read.
The PRESIDING OFFICER. The
amendment will be stated.
The CHIEF, CLERK. On page 63, between
lines 4 and 5, it is proposed to insert. the
following:
(1) Amend subsection (h) to read as fol-
lows:
".,(h) The term 'value' means-
"(1) with respect to any excess equipment
or materials furnished under chapter 1 of
title I, the gross cost of repairing, rehabili-
tating, or modifying such equpiment or ma-
terials prior to being so furnished;
"(2) with respect to any nonexcess equip-
ment or materials furnished under chapter I
of title I, which are taken from the mobili-
zation reserve, or which are taken from the
mobilization reserve but with respect to
which the Secretary of Defense has certified
that it is not necessary fully to replace such
equipment or materials in the mobilization
reserve, the average gross cost of each unit
of that equipment and materials owned by
the furnishing agency, adjusted as the Secre-
tary of Defense may determine to be appro-
priate for condition and market value, but
in no instance shall such adjustment result
in a price in excess of the average gross cost
of such equipment and materials; and
"(3) with respect to any equipment or ma-
terials furnished under chapter 1 of title I,
which are procured for the purpose of be-
ing so furnished, the gross cost to the United
States of such equipment and materials.
"In determining the gross cost incurred by
any agency in repairing, rehabilitating, or
modifying any excess equipment furnished
under chapter 1 of title I, all parts, acces-
sories, or other materials used in the, course
of repair, rehabilitation, or modification shall
be. priced in accordance with the current
standard pricing policies of such agency."
On page 63, line 5, strike out "(1)" and
insert " (2)."
On page 63, line 7, strike out "(2)" and
insert "(3)."
Mr. EILENDER. Mr. President, I ask
for the yeas and nays on this amend-
ment.
The yeas and nays were ordered.
Mr. ELLENDER. Mr. President, be-
fore I discuss the pending amendment, I
should like to review, for the benefit of
my colleagues, the course of this coun-
try's foreign-aid program from its in-
ception.
During and soon after the close of
World War II, this Nation began a, pro-
gram of aiding peoples throughout
Western Europe, the Middle East and
the Far East, who were badly hurt,
either financially or otherwise by the
war. I assume that I am correct when
I say that the United States is the only
nation which ever fought a war, defeated
its enemy, and then turned around and
gave aid and assistance to its former
enemies.
. Mr. President, at this time I shall not
go into the details of how such a course
came about. My objective at this time
is to describe how an aid program such
as was started by this country after
World War II could balloon into a being
of mammoth expenditures.
It will be recalled that the first actual
organization designed to furnish aid to
destitute peoples which the United States
established, with the assistance of some
of our friends across the seas, was
UNRRA, although prior to that time, we
had given considerable aid on an emer-
gency basis to the French, Italians, and
other peoples of Western Europe. This
aid, at the beginning, was devoted pri-
marily to the relief of actual hardships.
But soon relief grew into rehabilitation;
and from rehabilitation we proceeded to
reconstruction.
Mr. President, all of that was, in a
measure, begun when UNRRA was estab-
lished. Under that program, although
we were acting in association with some
countries of Western Europe, Uncle Sam
paid 73 percent of the total spent.
In passing, I wish to say that soon
after the war I visited many countries
which had received aid through UNRRA.
In particular, I remember going to Ethi-
opia. There, I saw more than 2,000 disk
plows and many tractors stacked up, and
which were never used. Th6se disk plows
and tractors could have been of value to
the United States; but we deprived'our-
selves of them, In order to make them
available to our friends who had been
hurt by a cruel war. However, the man-
ner and method in which UNRRA was
administered remind me a good deal of
the way In which later programs have
been administered. There was then, and
there has been since, decided waste in
all these programs, as I have pointed out
on many occasions.
Up to the dissolution of UNRRA,
United States expenditures amounted to
approximately $9 billion in grants and
from seven to eight - billion dollars in
loans. It is my sincere hope some of
this will be repaid. This was the cost
as the UNRRA program began as a relief
program, as I have just stated and then
moved into the field of rehabilitation.
When it was found that our friends,
who had contributed some funds to
UNRRA, would not put up any more for
the new field of reconstruction, then it
was that big-hearted Uncle Sam was
asked to carry the entire load. Soon
after was born the well-known Marshall
plan.
I wish Senators would listen, and I
hope those who are not present will read
the RECORD, so they can find out exactly
what kind of a program that great gen-
eral, George Catlett Marshall, asked us
to embark upon.
Mr. President, I have no apologies to
make for the vote I cast in favor of that
original program. If I had it to do over,
I would vote for It again, because its
original concept made sense.
It was to assist our friends across the
seas who had been hurt by a most cruel
war.
What did General Marshall say about
what was to become known as the Mar-
shall plan?
In discussing the plight in which Eu-
rope found itself at that time, General
Marshall said:
It is logical that the United States should
do whatever it is able to do to assist in the
return of normal economic health in the
world, without which there can be no po-
June 6
litical stability and no assured peace. Our
policy is directed not against any country
or doctrine, but against hunger, poverty,
desperation, and chaos.
Its purpose should be the revival of a
working economy in the world so as to per-
mit the emergence, of social and political
conditions in which free institutions can
exist. Such assistance, I am convinced,
must not be on a piecemeal basis as various
crises develop. Any assistance that this
Government. may render in the future should
provide a cure rather than a mere palliative.
General Marshall continued:
It would be neither fitting or efficacious for
this Government to undertake to draw up
unilaterally a program designed to place Eu-
ropg, on its feet ecdnomically. This is the
bu mess of the European. The initiative, I
think, must come from Europe.
That is what General Marshall had in
mind. That is what I had in mind when
I voted for the original Marshall plan.
Let me also quote from General Mar-
shall's statement before the Senate Com-
mittee on Foreign Relations and the
;House Committee on Foreign Affairs.
He said:
Loans should be made to cover-
Remember, he said loans.
Loans should be made to cover Imports of
capital equipment and raw materials which
will directly produce the means of repayment
and where such repayment can reasonably
be expected. At the same time every en-
couragement should be given to early initia-
tion of private financing so as to eliminate
as far as possible the necessity for direct
assistance from the United States Govern.
ment.
That was General Marshall speaking.
He said further:
It is obvious that the basic responsibility
for European recovery rests on the European
countrieg themselves.
Again, that was General Marshall
speaking.
However, this Government must have as-
surance that the aid it provides is effectively
utilized for the achievement of European
recovery as rapidly as possible.
Mr. President, there was little difficulty
in securing congressional approval of
such a program. Nor was there much
objection on the part of the people of the
United States in undertaking a program
of that character. But it was not long
before the principles enunciated by Gen-
eral Marshall were simply neglected. His
advice was not followed. We proceeded
on a program that has deviated entirely
from the proposals I have just read?
Mr. President, what was the objective
of the Marshall plan? I repeat:
The objective of the European recovery
program submitted for your consideration is
to achieve lasting economic recovery for
Western Europe; recovery in the sense that
after our aid has terminated, the European
countries will be able to maintain them-
selves by their own efforts ona sound eco-
nomic basis.
Again, that was General Marshall
speaking, this time before the Senate
Committee on Foreign Relations, Janu-
ary 8, 1948. But, Mr. President, through
December of 1957 we have spent more
than $50 billion on aid programs. The
Marshall plan was to last not over 5
years, and the amount we were to spend
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 was not to exceed from $15.1 billion to capacity of Europe could be increased by first for Western-Europe alone, not in-
$17.8 billion. 25 percent above prewar levels the goal eluding Turkey and Greece. Thirty-six
Again, I,quote the author of that pro would be reached and we could move of those were to be in the reserve and 30
gram, reading from page 6 of the hear- out. were to be active divisions. What is the
ings before the Committee on Foreign We reached that goal at the end of figure now?' It is now down to 12 or 14
Relations, United States Senate, under the third year, yet we have kept the pro- divisions, and a few of, those are still
date of January 8. What did General gram going until the industrial capacity paper divisions.' Almost half the active
Marshall say? of Europe today averages in excess of 168 divisions now in Europe are American.
The total estimated cost of the program percent of prewar capacity. Yet, England is pulling out troops, and
is now put at somewhere between $15.1 bil- Mr. President, with all that aid, with is also lowering taxes. Everybody
lion and $17.8 billion. But this will depend all the prosperity which we have brought knows what has happened in France in
on developments each year, the progress to the countries of Western Europe in recent days.
made,- and unforeseeable variations in the the hope, as Mr. Hoffman said, that they
weather as it affects crops. The overall cost would assist us in our quest for peace, With all that, Mr. President, we'-are
is not, capable of precise determination so still carrying on a program of assist-
far in advance. they have not done so. I say to the Sen- ante to those people, notwithstanding
ate that today at the end of the 10th the fact that they now are better off
Mr. President, let us see what the first year' of the so-called Marshall aid pro- economically than the have ever been
administrator of this program, Mr. Paul y
gram, conditions are worse insofar as in the past. Production in Europe Is the
Hoffman, had to say about' it. Appear- our relations with our ultimate enemy, highest in the history of France, Eng-
ing before the Senate Committee on Ap- Russia, are concerned, than at any time land, or Germany.
propriations on June 8, 1949-I was in the past 10 years. It looks as though As I shall point out later, whe I speak
there when he testified-Mr. Hoffman the more money we spend and give away
said, as is found on page 35 of the to the amendment I intend to `offer for
to our friends the -worse conditions be-
hearings: come. a specific cut in military aid, a very great I would like to make one final point. It As I pointed out a moment ago, this amount of money will be spent among
those friends of ours in Western Europe
may at first glance seem paradoxical, but program of grants and credits up to De- who are supposed to be of assistance to
I look upon the European recovery program cember 31, 1957, has cost the United
as our best hope. for brining Government States $62,144,000,000. Of this total net us in carrying the load. Our friends
spending down to a point where taxes will were- supposed to do all this on their
not be so oppressive, to a level at which our grants amount to $51 billion. own, but instead, Mr. President, we are
free economy is not endangered. Mr. President, if we had followed the being called upon.again to assist. As I
and outlined Gen-
listen to this: ,principles which were
Now have said on many occasions, so long as
I eral al Marshall, and had tried t to help say this because I see no way in which people Me help themselves, we might have we let them lean on our shoulder, be-
.our tax burden can be reduced substantially gotten somewhere. But this program lieve me, they will lean.
unless the threat of war and the consequent has simply been administered in such a Mr. President, all of us love this coun-
'necessity for maintaining an abnormal mill- way that we now can hardly break away try of ours, and we know it cannot afford
tary establishment is reduced. This econ-
omy cannot go on indefinitely spending $15 from it overnight. The people whom we to spend at the rate it is spending.
billion or more a year for military defense. have helped for the past 10 years now Mr. Hoffman said in his statement in
The surest way I know of to reduce the seem to be dependent on us. They will 1949 that we could not afford to spend
danger of war so that we may reduce our not make the moves they should. What $15 billion a year on defense.. We are
Military Establishment is to carry on the are they doing to help us in an attempt now spending over $40 billion a year,
recovery program to the point where a free to attain peace in Asia or in the Middle and that may continue indefinitely. As
and self-sustaining and unified Europe is East? Instead of assisting us, they are surely as I am speaking today, if we con-
able to play its full role in cooperation with harming our chances for peace. tinue to spend at our current rate and
the United States and other free countries Senators will remember that last year, spread ourselves as we are now doing,
in, maintaining the peace and prosperity of
the world., during the Suez Cnal crisis, England we are going to pring to our own shores
That was what Mr. Hoffman said when and France, without notifying us-with- the very thing we area fighting against,
ECA came before us for their third year's out saying anything to us-proceeded to namely, some kind of ism."
attack Egypt and caused a lot of harm Mr. President, I do not wish to take
appropriation. and damage. Was it not a sad state of the time of the Senate to go into detail
Let me point up what Mr. Hoffman affairs, after we had assisted them to the on these expenditures, although I have
stated was the goal at that time. extent we had, for us to have to side with the details before me.
Senator Cordon asked: , Russia on the question involved? I ask unanimous consent to have
Now, Mr. Hoffman, let us assume success What is happening today in north printed in the RECORD at this point as a
at the end of 1952. Let us assume that your of -Africa? Troops and materials of war part of my remarks a table indicating
tartit, which I believe is 130 'percent which we sent abroad in order to form
prewar production, has been achieved at that shield against aggression, about the expenditures of the United States on
that time. foreign-aid programs. This table shows
which we hear so much, were used and
And Mr. Hoffman answered: are being used in north Africa to further grants and loans and the programs for
I think the goal is a little less than that. France's dreams of maintaining colonial which they were disbursed.
I think it is about 125 percent, senator? empire. There being no objection, the table was
In other words, Mr. Hoffman indi- Mr. President, when NATO was or- ordered to be printed in the RECORD, as
cated that the moment the industrial ganized, we envisioned 66 divisions at follows:
TABLE 1.-Summary of foreign grants and credits-By program:t Postwar period, July 1, 1945, through Dec. 31, 1957; calendar year
ended Dec. 31, 1956; and calendar year 1957 (by quarter)
[Millions of dollars]
Net grants and credits_.-------- - ................................
Net grants (less conversions)-------------------------------------------
Gross grants ............................... ........................
Mutual socurity ..................................................
Military ald:
Military supplies and services 2 a_.,_
Multilateral-construction program contributions-.-----
Footnotes at end of table.
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Total
postwar
period
18, 977
449
Calendar
year 1956
2,571
68
2, 396
64
January-
March
April-
June
July-
September
449
13
October-
December
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1, 407
945
 935$ CONGRESSIONAL RECORD - SENATE June 6
ended Dec. 31, 1956; and calendar year 1957 (by quarter) -Continued
(Millions of dollars]
s
Calendar year 1957
Total
Calendar
postwar
year 1956
period
Total
January-
April-
July-
October-
March
June
September
December
Net grants (less conversions)-Continued
Gross grants-Continued
Mutual security-Continued
Other aid (economic and technical assistance):
Famine and other urgent and extraordinary relief ------
371
109
60
16
8
17
18
Other 24________________________________________________
20,542
1,465
1,400
347
443
288
323
Civilian supplies -----------------------------------------------
5,861
4
2
1
(6) -
1
1
UNRRA, post-UNRRA, and interim aid----------------------
3,443
--------------
--------------
--------------
--------------
--------------
--------------
Lend-lease ------------------------------------------------------
1,906
--------------
--------------
--------------
--------------
--------------
--------------
Military __
679
------------
--------------
--------------
-------
---,_?
Postwar pipelines------------------------------------------
1,227
---- ---------
--------------
--- ----------
--------------
--------------
----------- -
Greek?Turkish aid----------------------------------------------
....
653
--------------
-----?--------
--------------
-
. Military------------??-------------------------------M--
530
---
--------------
-------------
--------------
- -----??--
--------------
Other-------- -----------------------------------??---__
122
Philippine rehabilitation
655
---
--------------
--------------
------------ -
Surplus agricultural commodities through private welfare
agencies ?________ _____ __________________------------_ __
680
166
38
53
23
42
Militaryequipmentloansl'v1
383
57
18
22
17
Chinese military and naval
261
-
--------------
-------??___
_
Inter-American programs-----------------r------.--_-----_-___
201
19
4
6
5
4
Other-?-------------------------------------------------------
603
19
2
4
4
9
Less prior grants converted into credits__._._______________________
2,257
---------__-_-
---_-_-_----__
------_---_---
-------------
Less reverse grant'sand returns__----__-----------------------------
1,760
79
21
23
16
19
Mutual security foreign currency funds-------------------------
1,009
79
21
23
16
19
Military aid collections (for administrative expenses)_M_
69
6
12
3
2
3
4
Other aid (economic and technical assistance) counterpart
funds______________________________?-_.____...._..._.____
940
6
67
17
22
13
15
Reverselend-lease
133
--
-...._--------
Cash war-account settlements for lend-lease and other grants--
120
--------------
--------------
--------------
-------------
--------------
Return of lend-lease ships--------------------------------------
490.
--------------
---?---------
--------------
--------------
For military use---------------------------------------- M--
189
--------------
--------------
--------------
--------------
-------,_..---
For economic value----------------------------------------
301
--------------
--------------
-----------_.-
--------------
--------------
---------
Return of, a nd cash settlements for, civilian supplies -----------
4
3
____________
____
________ ______
Return of military equipment loans 7----------------------- M__
- `
4
Net credits (including conversions) ----------------- _-------------------
11,196
-25
346
-6
-
101
-9
'.
463
AreWcredits ---------------- ----------------------------------------
13,763
484
080
120
122-
153
585
Export-Import Bank (for own account)-------------------------
5,446
233
667
61
70
67
469
Direct loans ------------------------------------------------
6,145
223
639
69
70
83
427
Loans through agent banks---------------------------------
301
10
28
2
(~)
Cr 16
42
British loan ----------------------------------------------------
3,750
----.,
Mutual security 2-----------------------------------------------
2,492
229
. 313
69
52
85
117
Surplus property (including merchant ships) --------------------
1,492
6
--------------
__?
____----------
--------------
-- ---------
Lend-lease (excluding settlement credits)
71
--------------
.
.
.
.
Othe r-=-----------------------------------------------------
513
.
1
1
..
(?)
(6)
(7)
lus prior grants converted into credits_________________________________
2,257
-.-_____--__-_
_._____.______
_______._-_
-__.___-._.___
__-___-_-__---
Less principal collections__-_-________,_______________________________
4,824
634
125
224
142
123
Export-Import Bank (for own account)
2, 675
.
.
318
85
79
.
75,
80
Direct loans
2,342
308
82
75
73
79
Loans through agent banks
333
10
3
4
2
1
British loan------------------------------------------------------
280
49
--------------
--------------
--------------
--------------
-------------
Mutual security 8---------------------------------------------------
94
24
34
3
15
7
9
Surplus property (including merchant ships) -----------------------
G
641
65
92
21
19
35
17
rants converted into credits_______________________________________
Lend-lease (excluding settlement credits) ---------------------------
152
308
20
71
13
163
1
15
(1)
109
12
28
(6)
12
Other 8-??--------------------------------------------------------
675
13
13
(8)
2
5
P
5
1 Grants are transfers for which no payment is expected (other than a limited
percentage of the foreign currency "counterpart" funds generated by the grant), or
which at most involve an obligation on the part of the receiver to extend aid to the
United States or other countries to achieve a common objective. Credits are loan dis.
bursements or transfers under other agreements whi h give rise to specific obligations
to repay, over a period of years, usually with interest. In some instances assist-
ance has been given with the understanding that a decision as to repayment will be
made at a later date; such assistance is included in grants. At such time asan agree-
ment is reached for repayment over a period of years, a credit is established. Such
credits, cannot, as a rule, be deducted from specific grants recorded in previous pert=
ods, an adjustment for grants converted into credits is made at the time of agreement.
All known returns to the U. S. Government stemming from grants and credits, other
than interest, are taken into account in net grants and net credits. The measure of
foreign grants and credits generally is in terms of goods delivered or shipped by the
U. S. Government, services rendered by the U. S. Government, or cash disbursed by
the U. S. Government to or for the account of a foreign government or other foreign
entity. The Government's capital investments in the International Bank ($635
million), International Finance Corporation ($35 million), and International Mone-
tary Fund ($2,750 million) are not included in these data although they constitute an
additional measuie taken by this Government to promote foreign economic recovery
and development. Payments to these three institutions do not result in immediate
equivalent aid to foreign countries. Use of available dollar funds is largely determined
by the managements of the institutions, in some instances subject to certain controls
which can be exercised by the U. S. Government.
Further definition and explanation of these data are contained in. the Foreign Aid
supplement to the Survey of Current Business, published November 1952, and In the
explanatory notes to the appendixes of the National Advisory Council on Interna-
tional Monetary and Financial Problems semiannual reports to the President and
to the Congress.
`' Includes foreign currencies which were obtained through sale of agricultural
commodities under title I of the Agricultural Trade Development and Assistance
Act (Public Law 83-480, as amended) and which were available under sees. 104 (c)'
(d), (e), and (g) for expenditure without charge to a dollar appropriation.
3 Includes mutual security program aid for common use items which are to be used
by military forces of nations receiving assistance, and for direct forces support, when
such assistance provided under (repealed) sees. 123 and 124 of Public Law 83-665,
as amended, was administered in accordance with Chapter 1: Military Assistance,
of title I of that act. Cash transfers are included in "Other aid (economic and tech-
nical assistance)"; see footnote 4.
4Includes mutual security program aid for economic,, development, relief, and
technical assistance, including aid for these purposes from military aid appropria-
tions. Also includes mutual security program aid from appropriations for common-
use items which are to be used by military forces of nations receiving assistance, and
for direct forces support, when such assistance under (repealed) sees. 123 and 124
of Public Law 83-665 was administered in accordance with Chapter 3: Defense
Support, of title I of that act. Also includes transfers of funds for forces support
(for example, in Cambodia, Laos, and Vietnam (and forces of France located in such
states)) and in support of production for forces support.
8 Less than $500,000.
6Includes donations through United Nations Children's Fund under authority
of sec. 416 of Public Law 81-439, as amended by title III of Public Law 83-480.
7 "Military equipment loans" are included in this report is part of military grants;
these "loans" are essentially transfers on an indeterminate basis, generally requiring
only the return of the identical item, if available. In essence this was the require-
ment pertaining to wartime lend-lease transfers of watercraft, which were included
as grant transfers in these data.
8 Values for deliveries of materials in payment of principal reported as collected
by the General Services Administration on deficiency and strategic materials devel-
opment loans are in some instances estimated when first reported. Reported data
have been adjusted to eliminate obvious (negative) bookkeeping adjustments as
final values are recorded,
NOTE.-Programs identified by M are included in "Military grants" in table 2.
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 1958 = CON( KEZ5SIVINAL ItLWx1) - JB1Vt11B
Mr. ELLENDER. As I have indicated,
we made loans to various countries. I
hope some of the loans will be repaid.
I have high hopes that particularly the
Export-Import Bank loans will be repaid.
I ask unanimous' consent to have
printed in the RECORD at this point as a
Cumulative statement o
Area
Amount
Authorization ----------------------------------------- --
--------------------
------------------
$8,959,418,211.64
Authorizations taken pver by others, without recourse to
Latin America---------------------------------------
--------- -------?--
$28,376,568.27
------------------
Europe----------------------------------------------
--------------------
168,018,795.63
--------,---------
Asia-------------------------------------------------
------_-----------
14,000,000.00
363
90
210
395
Canclellations and expirations____________________________
____________________
__________________
,
.
,
1,377, 216, 659.80
Disbursed by
Export-Import
others at Export-
Amount
Bank funds
Import Bank
risk
__-------_------- __________-_------
Disbursements
___
$5,457,166,344.04
$482910,221.15
$,5,940,076,565.19
_
_
Repayments ---------------------------------------------
2, 520, 759, 667.38
434:774,427.99
2, 955, 534, 095.57
Outstanding loans-
2,936,406, 2
936,406, 676. 66
48, 135, 793. 16
2, 984,542,469. 82
622
76
431
729
1
Authorizations not disbursed_.
Total of outstanding loans and balance of authorh:ations
-
_
.
,
,
,
092. 57
272
4
416
not disbursed------------------------------------------
Lending authority assigned by bank under provisions of
--------------------
------------------
,
,
,
000
00
50
"
Public Law 30,83dCon ,forcottoninsurance..._______
din
t
it
itt
d l
U
_________________
-----------------
-----------
,
.
,
533,727,907.43
I
g au
y_________________.._______
or
en
ncomm
e
--------------------
-------
Mr. ELLENDER. We recently in-
creased the borrowing capacity of the
Export-Import Bank by $2 billion. As
I recall, the bank started with a mere
$250 million. The figure is now up to $7
billion of credit.
This corporation is owned entirely by
the Federal Government. It has a cap-
ital of $1 billion, with $6 billion addi-
tional for lending purposes.
Aside from that, we are heavy sub-
scribers to the International Finance
Corporation, another institution which
was created in order to assist people
who were in distress because of war. In
that institution, with a capital subscrip-
tion stock of $92 million, we have $35,-
168,000, or 38 percent of the stock,
which we subscribed in order to assist
countries in rehabilitating themselves.
I ask unanimous consent to have
printed in the RECORD at this point, as
a part of my remarks, a table showing
a statement of subscriptions to capital
stock and voting power as of September
10, 1957, in the International Finance
Corporation.
There being no objection, the table
was ordered to be printed' in the RECORD,
-INTERNATIONAL FINANCE CORPORATION
Statement of subscriptions to capital stock
part of f y remarks a table showing the
status of the Export-Import Bank from
February 1934, the time it was organized,
to December 1957, inclusive.
There being no objection, the table
was ordered to be printed in the RECORD,
as follows.
EXHIBIT C Cont'i'nued
Statement of subscriptions to capital stock
and voting power, Sept. 10, 1957-Con.
Amount
(in thou-
sands of
dollars)
Percent
of total
Num-
ber of
votes
Percent
of total
United Kingdom__
14, 400
15.58
14,650
13.93
United States______
35,168
38.04
35,418
33.67
Venezuela-----____
1 116
.13
366
.35
T9tais,-__-.,_
EXHIBIT B
ExPORT-IMPORT BANE
loans and authorized credits, February 1934 to December 1957,
inclusive
Subscriptions
Amount
(in thou-
sands of
dollars)
Percent
of total
Australia ---------- I 2,215 2.40
Austria ------------- 554 11 .60
Belgium ----------- 2, 492 2.70
Footnotes at end o;f table.
Num-
ber of
votes
Percent
of total
2,465
804
2, 742
2.34
.76
2.61
1 The subscription of Egypt has not been paid, having
been due since Aug. 23, 1950.
1 Less than 0.005 percent.
Mr. ELLENDER. That is not all. In
order further to assist foreign countries,
act which gives the Commodity Credit
Corporation authority to sell surplus
farm commodities abroad. Through
that medium Europe will receive $160,-
500,000 in 1959. Countries which al-
ready are prosperous will receive vast
long-term basis. Africa will receive $3,-
200,000. The Near East and South Asia
will receive $433,500,000; the Far East,
$93,500,000. There will be retained, for
sale and disposal to countries which
have no defense program, $360 million.
How that will be distributed no one
knows as yet . _
- I ask unanimous con=
President,
EXHIBIT C-Continued Mr.
sent to have printed in the RECORD at
Statement of subscriptions to capital stock this point as part of my remarks an
and voting power, Sept. 10, 1957-Con. exhibit showing, for the fiscal year 1959,
i I an estimate of the Public Law 480 op-
Bolivia -_-__-_--__-
Brazil______________
Burma_____________
Canada.-
Ceylon------------
Chile --------------
Colombia___--_-___
Costa Rica -_.--_-_
Cuba--------------
Denmark---_-_-.--
Dominican
Republic---------
Ecuador -----------
Egypt'------------
El Salvador --_----_
Ethiopia--_-___--__
Finland--_-__-_-___
Franca-_-___-_-__
Germany----------
Guatemala_--_ -_
Haiti--------------
Honduras_-_---_--_
Iceland-----_-__--_
India______________
Indonesia--__--_-__
Iran---------------
Ira4---------------
Israel--------------
Italy---------------
Japan--------------
Jordan-------------
Lebanon_.._____---
Luxembourg-_--___
Mexico
Netherlands-------
Nicaragua- _ - _ _ _--_
Norway--.-------
Pakistan------___--
Panama--_??___-
Paraguay_---___---
Peru---------------
Philippines _ __ _
Sweden------------
Thailand -: _-__--_-
Turkey________-___
Union of South
Africa-----------
Amount
(in thou-
sands of
dollars)
78
1,163
166
3,600
166
388
388
22
388
753
22
35
590
11
33
421
5,815
3,655
22
22,
11
11
4,431
:1,218
372
67
50
1, 994
2, 769
33
50
111
720
3,046
9
564
1, 108
2
16
194
166
1,108
139
476
Num-
Percent ber of
of total " votes
.08
1.26
18
3.89
.18
.42
.42
.02
.42
.81
.02
.04
64
:at
.04
.46
6.29
3.95
.02
.02
.01
.01
4.79
1.32
.40
.07
.05
2.16
3.00
04
.05
.12
.78
3.30
.01
. 60
1.20
(1)
.02
.21
.18
1.20
.15
.51
328
1, 41a
416
3,850
416
638
638
272
638
1,003
272
285
840
261
283
671
6,065
3,905
272
272
261
261
4,681
1,468
622
317
300
2,244
3,019
283
300
361
970
3,296
259
804
1, 358
252
266
444
416
1,358
389
726
erations.
There being no objection, the table
was ordered to be printed in the RECORD,
of total as follows:
EXHIBIT D
Public Law 480 estimate fiscal year 1959
31
1.34.
.40
3.66
40
.61
.61
.26
.61
.95
26
:27
.80
.25
.27
.64
5.77
3.71
26
:26
.25
25
4.45
1.39
59
.30
28
2.13
2.87
27
:28
.34
.92
3.13
.25
Europe-----------------------
$160,500,000
Africa -----------------------
3,200,000
Near East and South Asia-----
433, 500, 000
Far East---------------------
93,600,000
Reserved for countries not pro-
posed for defense support or
special assistance in fiscal
year 1959------------------
360,000,000
Total------------- ---1,050,700,000
Mr. ELLENDER. Mr. President, this
aid program has been pyramiding from
year to year. The President has asked
the Congress to make available $3.9 bil-
lion in new funds for foreign aid, through
the bill we are now considering.
In addition, as I have just pointed out,
we have increased the capital stock of
the Export-Import Bank to the tune of
$2 billion,to make loans to our friends.
What is more, under Public Law 480,
there has been an increase of $500 mil-
lion in the authority for sales for the
current fiscal year, for a total of $2 bil-
- lion during the current year. It is true
that the bill is still pending in the House,
1.29 but that is what the Senate has done.
24
.225 I am sure the House will agree to it.
.40 If we add all these items together, we
1.29 see that for the coming fiscal year there
sa will be available, by way of grants, loans,
gifts, and sales on easy terms of surplus
1.29 farm commodities; almost $8 billion.
And this is what we are confronted with
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today: With our heavy tax load remain-
ing as it is to support this program, our
friends are reducing theirs.
Anyone. with commonsense should
realize that we Cannot afford to continue
these huge expenditures without bring-
ing to our own shores some kind of ism.
If by maintaining excessively high taxes
we destroy initiative in this country, we
shall see what will happen.
Mr. President, one of the programs on
which we are spending a few million
-dollars of this tax money is to teach
the French, Italians, and others the fine
points of salesmanship. They have
learned fast. In any city in America
today-I care not how small it is-we
can see a great many French, Italian,
and British cars. Many of the factories
in which those cars are being manufac
tured were financed by taxes paid the
very companies which are now in trouble
in Detroit, That is what is happening.
Mr. CURTIS. Mr. President, will the
Senator yield?
Mr. ELLENDER. I yield.
Mr. CURTIS. The Senator is a, dis-
tinguished lawyer with a long record of
service. I should like to have him point
out to me the provisions in the. Constitu-
tion of the United States which authorize
us to tax the American people to con-
duct salesmanship courses in foreign
countries.
Mr. ELLEINDER. Everything being
done is supposed to be for defense; it
is supposed to be for our protection and
security.
Mr. CURTIS. Including salesman-
Ship?
Mr. ELLENDER. That is the basis
on which it was done.
Mr. CURTIS. I am familiar with
that. However, calling it something
does not make it so.
Mr. ELLENDER. I understand, but
that is the basis for it. That would be
the answer. I do not suppose a tax-
payer would stand a ghost of a chance
if he tried to...stop it.
Mr. CURTIS. No; I do not believe he
would. There would be no way for him
to get into court. However, we have a
responsibility.
Mr. ELLENDER. Certainly.
Mr. CURTIS. We have a responsi-
bility to do only those things which are
in accord with the power delegated to
Congress by the Constitution.
Mr. ELLENDER. Yes. I have been
arguing for the past 4 or 5 years that
these programs should be tapered off.
However, it seems that as the years go
on, instead of tapering off, they increase.
That is what is happening. What I wish
to emphasize and reemphasize is that
this program was begun with the idea
of putting our friends in Western
Europe on their feet, so that they
could be of assistance to us and help us
carry the load for the rest of the world.
We were selfish in that regard let us
admit it. That is why we did it. But as
I have asked onmany occasions on the
floor of the Senate: Who is carrying the
load in' the Middle East, in southeast
Asia, on Formosa, and in South Korea?
In South Korea, according to the record.
I believe two or three countries have
representation in the honor guard.
Who is footing the logistics bill for
those troops? It is the U. N., through
contributions that we make. In other
words, aside from carrying our own
load; paying expenses of feeding our
soldiers there and providing defense
support for the twenty-odd divisions of
ROK troops-we are paying for all of
that and receiving no help from any-
one-we are paying to maintain the
token forces which are there from
Britain, Turkey, and from two or three
other countries.
We have reached the point where it
does not make any sense for us to keep
on spending at our present rate. I
could go on and on in discussing these
programs. I am familiar with them. I
have visited all the countries in the
world but two. I have seen how these
programs operate. I have made reports
to the Senate. I made them last year
and the year before, and I have been
making reports to the Committee on
Appropriations for the past 7 or 8 years.
The reports of about 2 years ago are
merely gathering dust, for aught I know.
I made an earnest effort to show to my
colleagues how these programs were
being administered, and how the money
was being spent. Yet with all I have
shown, we are still spending at a greater
rate than we have in the past; and in-
stead of tapering off, the program is
continuing to increase.
I wish now to address myself to the
amendment which is pending, the so-
called pricing amendment. In 1956 the
Committee on Foreign Relations sought
to change the method of pricing mili-
tary hardware which was purchased by
ICA for the mutual-security program
for distribution throughout the world
from Defense Department stocks. After
a study, it was found that, instead of the'
Defense Department charging the actual
gross cost of an article to the foreign-
aid program, the program was being
charged the replacement cost. Prior to
the 1956 amendment, if an obsolete air-
plane, which originally cost $200,000,
was sold to MAP by the Defense Depart-
ment for country X, and it was neces-
sary for the Department of Defense to
replace that obsolete plane, the for-
eign-aid program would be charged the
full amount of the cost of the new plane,
which may Have been four times the
cost of the obsolete aircraft. The Gen-
eral Accounting Office found that the
price of some equipment charged to the
mutual-security program was 170 per-
cent of the original cost. Thus, the De-
partment of Defense was able to obtain
funds for the purpose of financing its
procurement programs without review
by the Congress.
The purpose of my, amendment is to
accomplish that which the committee
desired to do with its amendment in 1956.
Let me read what the chairman of the
Committee on Foreign Relations, the dis-
tinguished Senator from Rhode Island
[Mr. GREEN], said when the matter came
up in 1956. I read from page 11102 of
June 6
the CONGRESSIONAL RECORD of June 22,
1956. That was the year an attempt
was made to change the law to prohibit
the charge of replacement costs to the
MAP. He said:
What actually has been happening, how-
ever, is that when these mutual-security
funds are used to buy, for example, an F-84
jet fighter to be given to country X, the
Air Force, which sells the jet fighter for the
mutual-security people, uses the funds re-
ceived to replace the F-84 with a later model
aircraft-perhaps an F-104. In effect, then,
a substantial part of the funds made avail-
able for what some people call foreign aid
has been used to modernize the arms in the
possession of our own Armed Forces. Indeed,
the Armed Forces of this Nation have been
charging the mutual-security funds, not for
theprice of the F-84 in my example, but they
have been charging the price required to re-
place it, namely, the price ' for the F-104.
The present Mutual Security Act, however,
will change that situation.
An amendment to that effect was
adopted in 1956. The law remained as
it was, but there was added a so-called
"notwithstanding clause," which reads as
follows:
Notwithstanding the foregoing provisions
of this subsection (h) and for the purpose of
establishing ?a more equitable pricing sys-
tem for transactions between the military
departments and the mutual defense assist-
ance program, the Secretary of Defense shall
prescribe at the earliest practicable date,
through appropriate pricing regulations of
uniform applicability, that the term "value"
(except in the case of excess equipment or
materials) shall mean-
(1) The price of equipment or materials
obtaining for similar transactions between
the Armed Forces of the United States; or
(2) Where there are no similar transactions
within the meaning of paragraph (1), the
gross cost to the United States adjusted as
appropriate for condition and market value.
That was to mean, or so we thought,
that the actual cost of the hardware in
the hands of the armed services would be
charged to the foreign-aid program. But
pursuant to the "notwithstanding" clause
which I have just read, here are the regu-
lations issued by the Department of De-
fense, which are presently followed:-
Standard prices shall be established for
each item of material to include:
a. The current purchase or production cost
of the item at the time the price is estab-
lished.
In other words, notwithstanding the
fact that the views of Congress on this
subject were pointed out to the armed
services, the regulations from which I
am reading reinstated the old practice of
charging replacement costs instead of ac-
tual costs. The Department of Defense
has not really sought to change its old
method of pricing.
I believe that my amendment will bring
about the change desired by the 1956
amendment. It will result in an equi-
table price being charged to the MAP,
and consequently an adequate reimburse-
ment to the furnishing agency. For
example, let us assume that the Army
sells to MAP a quantity of 200 of a cer-
tain type of tank. Let us further as-
sume that the Army purchased a total of
1,500 of these tanks over a 3-year period
as follows:
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CONGRESSIONAL RECORD - SENATE
tion reserve (other than equipment or ma-
terials referred to in paragraph (3) of this
subsection), the actual or the projected
(computed as accurately as practicable) cost
of procuring for the mobilization reserve an
equal quantity of such equipment or mate-
rials or an equivalent quantity of equipment
or materials of the same general type but
deemed to be more desirable for inclusion
in the mobilization reserve than the equip-
ment or materials furnished;
(3) with respect to any nonexcess equip-
ment or materials furnished under chapter 1
of title I which are taken from the mobiliza-
tion reserve but with respect to which the
Secretary of Defense has certified that It is
not necessary fully to replace such equipment
or materials in the mobilization reserve, the
gross cost to the United States of such equip-
ment and materials or its replacement cost,
whichever the Secretary of Defense may
specify; and
(4) with respect to any equipment or ma-
terials furnished under chapter 1 of title I
which are procured for the purpose of being
so furnished, the gross cost to the United
States of such equipment and materials.
In* determining the gross cost incurred by
any agency in repairing, rehabilitating, or
modifying any excess equipment furnished
under chapter 1 of title I, all parts, acces-
sories, or other materials used in the course
of repair, rehabilitation, or modification shall
be priced in accordance with the current
standard pricing policies of such agency.
Quantity
Unit cost
Total cost
1963------------------
200
$40,000
$8,000,000
----------------
1954
600
60,000
30,000,000
--
1958------------------
600
80,000
48,000,000
Total -----------
1,300
----------
86, 000, 000
The average gross cost referred to in
my amendment would be obtained by
dividing the quantity of 1,300 into the
total cost of $86 million, and this would
be the price charged to MAP, instead
of the replacement cost of $80,000.
Mr. CURTIS. Mr. President, will the
Senator yield?
Mr. ELLENDER. I yield.
Mr. CURTIS. As the Senator perhaps
knows, I have consistently supported his
efforts to reduce the amounts appropri-
ated for mutual security.
Mr. ELLENDER. For that I am deeply
appreciative.
Mr. `CURTIS. What will be the net
effect of the pending amendment upon
the United States Treasury? If I un-
derstand correctly, it will reduce the
amount expended by the administration
for mutual security. Will that be to the
disadvantage of the budget of the De-
fense Department? What will be the
net effect? For the purpose of this subsection, the gross
Mr. ELLENDER. I will say that the cost of any equipment or materials taken
net effect will be that the Committee from the mobilization reserve means either
on Appropriations will have absolutely the actual gross cost to the United States
control over the money used to pur- of that particular equipment or materials
no or the estimated gross cost to the United
chase these replacements for the various States of that particular equipment or mate-
services. In other words, if the Depart- rials obtained by multiplying the number of
ment'of Defense sold tanks or airplanes units of such particular equipment or mate-
to the mutual-security, program, they rials by the average gross cost of each unit
would not even have to use the money of that equipment and materials owned by
they obtained from foreign-aid appro- the furnishing agency. Notwithstanding the
foregoing proyisions of this subsection (h)
priations for replacing tanks or airplanes. and for the purpose of establishing a more
They could program it for anything they equitable pricing system for transactions be-
desire. They would not have to come tween the military departments and the mu-
before the Committee on Appropriations tual defense assistance program, the Secre-
and justify their request, as is the case t Defense nse es tall prescribe
appropriate earliest
i now when they want to purchase ma- practicable P t
terial. This is money they will take out regulations of uniform applicability that the
of the foreign-aid program without hav- term "value" (except in the case of excess
equipment or materials) shall mean-
-ing to account to the Committee on Ap- (1) the price of equipment or materials
propriations-and the American peo- ,obtaining for similar transactions between
ple-as to how the funds are expended. the Armed Forces of the United States; or
My proposal is that if, for instance, (2) where there are no similar transactions
new planes are needed, the Department within the meaning of paragraph (1) the
of Defense should come before the Ap- gross cost to the United States adjusted as
appropriate for condition and market value,
request.
if the amendment should be agreed
to, it will accomplish the very thing
which was intended in 1956, namely, to
charge the mutual-security program the
average cost of the materials sold it.
Mr. President, I ask unanimous con-
sent to have printed at this point in the
RECORD an item from the Mutual Secu-
rity Act of 1956, beginning with section
545(g) and continuing through the para-
graph identified as (2).
There being no objection, the excerpt
was ordered to be printed in the RECORD,
as follows:
(h) The term "value" means-
(1) with respect to any excess equipment
or materials furnished under chapter 1 of
title I the gross cost of repairing, rehabilitat-
ing, or modifying such equipment or mate-
rials prior to being so furnished;
(2) with respect to any nonexcess equip-
ment or materials furnished under chapter 1
of title I which are taken from the mobiliza-
Mr. ELLENDER. Mr. President, I ask
unanimous consent to have printed at
this point in the RECORD the Defense De-
partment directive which was issued fol-
lowing passage in 1956 of the amend-
ment designed to end this practice of
overcharging. To my mind this direc-
tive indicates that no change at all in
Defense Department policy has been
made. Their action is subject to the
interpretation that they have defined
standard prices to mean replacement
prices.
There being no objection, the order
was ordered to be printed in the RECORD,
as follows:
2. Standard prices shall be established for
each item of materiel to include:
(a) The current purchase or production
cost of the item at the time the price is
established.
(b) First-destination transportation costs.
The expense of procurement (including
Inspection), warehousing, redistribution, re-
packing and handling, or other functions of
supply administration shall not be included
in the standard prices. There shall be one
standard price for each item-price reduc-
tions for condition at time of sale shall not
affect standard pricing for inventory pur-
poses.
Mr. ELLENDER. Mr. President, I
also ask unanimous consent to have
printed at this point in the RECORD, from
the pamphlet entitled "Proper Account-
ability, Army Pricing Policy," in section
1, entitled "General," on page 11, para-
graph (2) (g) which reads as follows:
(g) For the purpose of establishing a
standard price, the current purchase or pro-
duction cost of an item will be based upon
evidence such as current contracts, pur-
chase orders, or invoices. Judgment, how-
ever, may be required to modify prices to
allow for the effect of pending contract price
revisions and other factors affecting the
most typical replacement cost. Also, since,'
prices may vary considerably for different
vendors withi{ a single normal procure-
ment lot, it will be necessary in such cases
to average the prices. The objective is to
arrive at a price which represents current
replacement cost.
Mr. ELLENDER. Mr. President, all of
these directives have been issued since
the passage of the 1956 amendment.
Mr. President, in the Department of
Defense directive of December 31, 1956,
No. 7510.1, there is also a paragraph on
the question of uniform pricing policy for
materials. I ask unanimous consent that
the first two paragraphs be printed at
this point in the RECORD, so as to indi-
cate-as I have just stated-that, not-
withstanding the fact that c.-e tried to
change the law, the directive has been
written in such a way that the same price
structure and methods of pricing which
prevailed prior to 1956, still prevail.
There being no objection, the excerpt
was ordered to be printed in the RECORD,
as follows:
DEPARTMENT OF DEFENSE DIRECTIVE No. 7510.1,
DECEMBER 31, 1956
Subject: Uniform pricing policy for materials,
supplies, and equipment financed by mill-,
tary appropriated funds
1. PURPOSE
The purpose of this directive is to establish
the basic policies and criteria to be followed
by the military departments in pricing for in-
ventory accounting and issues or sales for any
purpose of all materials, supplies, and equip-
ment (materiel) except for plant equipment,
aircraft (complete), and ships, and materiel
financed under working-capital funds for
which pricing policy has been established
pursuant to section 405 of the National Se-
curity Act of 1947, as amended, and Depart-
ment of Defense regulations thereunder (De-
partment of Defense Directive No. 7420.1,
dated December 19, 1956, and Regulations
Covering the Operation of Working-Capital
Funds for Industrial- and Commercial-Type
Establishments, Industrial Funds, dated
July 13, 1950) .
This directive also establishes the policy
under the 1956 amendments of the Mutual
Security Act of 1954, pertaining to pricing of
items chargeable to the military-assistance
program (MAP) because it is required gen-
erally that the same item prices' be used for
that purpose as would be used for similar
transactions between the military depart-
ments.
Mr. ELLENDER. Mr. President, I shall
not take any more time of the Senate in
discussing this amendment. I have sev-
No. 91-9
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CONGRESSIONAL RECORD -SENATE June 6
eral other amendments, and I hope to problem, and also to a better under- in time for the committee to have given
present them in order. standing between the people of the consideration to it and in time for us
Since I have made my opening state- United States and the people of Russia. to have questioned representatives of
ment on the amendment, I shall confine Mr. ELLENDER. I thank the Senator the Defense Department and represent-
the remainder of my remarks to more or from Mississippi, atives of the State Department in re-
less a description of its effect. Mr. HUMPHREY. Mr. President, let gard to what the amendment means and
Mr. STENNIS. Mr. President,. will me say that although I disagree with what its impact might be.
the Senator from Louisiana yield to me? the amendment of the Senator from Mr. ELLENDER. Mr. President, will
The PRESIDING OFFICER (Mr. JOR- Louisiana-primarily 'because in the the Senator yield?
DAN in the chair). Does the Senator committee we did not have a chance to Mr. SPARKMAN. Yes.
from Louisiana yield to the Senator from review it,,and because it is a very com- Mr. ELLENDER. Would it not be pos-
Mississippi? plicated piece of proposed legislation- sible to take an amendment of this kind
Mr.ELLENDER. I yield. yet I believe that every Member of the to conference? I think it is important.
Mr. STENNIS. I wish to commend Senate is certain that the Senator from It may be true that it was not studied
the Senator from Louisiana {Mr. ELLEN- Louisiana is an extremely conscientious by committee, but the committee went
DER] fbr the very fine and effective pres- and devoted public servant. He gives a into this subject very thoroughly in 1956,
entation he has made. I believe he has great deal of time and attention to these and was of the opinion ,that the defects
a better on-the-ground knowledge and matters. I agree thoroughly with what I have cited would be cured by the short
understanding of the operation of many the Senator from Mississippi [Mr. STEW- proviso I have read.
major phases of this program than does Nis] has just stated in regard to the un- Mr. SPARKMAN. I just made that
any other Member of the Senate. All tiring efforts of the Senator from Lou- point. In 1956 the committee did study
of ~s owe him a great debt of gratitude isiana to promote better understanding the matter, and did reconstitute or re-
for the energy and time he has devoted between peoples. direct it. As a matter of fact, as recently
to this work and for the expense to which Mr. STENNIS. I thank the Senator as January of this year, the Comptrol-
he has gone in connection with it and in from Minnesota. ler General stated that the new system,
connection -with, gathering information Mr. ELLENDER. Mr. President, I the one established in the fall of 1956-
from all over, the world. He has made thank my colleagues. I believe it was in December 1956, that
many trips abroad. Mr. SPARKMAN, Mr. President, I the first directive was issued-has been
Mr. President, I believe it is a sad day wish to join my colleagues in expressing so recently installed that it is premature
in the history of the Senate when infor- my high regard and high esteem for the to form a judgment as to its effective-
mation and facts which a Member of very 'able Senator from Louisiana [Mr. ness.
this body has obtained at firsthand are ELLENDER] ; and I do not use those terms We thought we did a good job in 1956.
not listened to more generally by Sen- as mere figures of speech. I mean them The Defense Department andthe Comp-
ators. I do not mean that as a personal most sincerely. troller General both tell us they have
reflection on any Member of the Senate, The Senator from Louisiana is very not yet had time to decide how effective
for it is true that Senators are too busy able; and he has done an extremely fine a job has been done. Therefore, I sub
to be able to hear everything that is said job-as has been stated by various of mit that the amendment, to use the
in this Chamber. But I am sorry that my colleagues-in connection with the words of the Comptroller General, may
more of us cannot make it a point-to many trips he has taken to other coun- be premature,
hear such presentations. tries. We know that, every year, as soon I do not question the intent, the sin-
I believe someday we shall exercise as the session of Congress adjourns, the cerity, or the thoroughness with which
more conLmonsense in connection with Senator from Louisiana begins a foreign the Senator from Louisiana has gone
this subject and related subjects. When trip. In making such trips, he works into the question. I do not say the
we do, I believe we shall refer again to very hard in the course of visiting various amendment is not a good one. I do not
the speeches of the Senator from Lou- countries. Asa matter of fact, I suppose know. We simply have not had time to
isiana and shall hail him again as a he has visited more foreign lands than evaluate it.
Senator of wisdom and vision. has any other Member of the Senate. With reference to the suggestion of
I shall vote for, the amendment he In this connection, Mr. President, I the Senator from Louisiana that the
has submitted, but I make this expres- wish to say that I belieire one of the amendment be taken to conference, I re-
sion of thanks to him without regard to finest things a Member of Congress can mind him I am not in control of the bill.
the way I shall vote on his amendment. do-in fact, I have often said that if I It might very well be that if the chair-
Mr. ELLENDER. I thank the Senator had my way, I would require it of all man of the committee were present and
from Mississippi. Members of Congress-is to travel. I that suggestion were made to him,' he
Mr. CARLSON. Mr. President, will believe that in these days of such great would express his willingness to take the
the Senator from Louisiana yield to me? problems, the members of the Appro- amendment to conference, and in the
Mr. ELLENDER. I yield. priations Committee and the members meantime try to obtain additional infor-
Mr. CARLSON. I, too, wish to express of the Armed Services Committee and mation about /it. I am not empowered
my thanks to and commendation of the the members of the Foreign Relations to speak for the chairman of the com-
Senator from Louisiana [Mr. ELLENDER] Committee should travel to many other mittee.
for the information he has brought to countries, to see what is done there. On the ground that the amendment is
the Senate. I share the views of the Certainly I would not question the premature and that at this time we do
Senator from Mississippi [Mr. STENNIS) accuracy of any of the reports the Sen- not know how the 1956 provision is
regarding the service the distinguished ator from Louisiana has made in regard working, I shall have to oppose the
Senator from Louisiana has rendered the to the things he has seen abroad. amendment.
country by making his trips. Those of On the other hand, I do question the I suggest to the acting majority lead-
us who have heard his statements and wisdom of this amendment. er [Mr. STENNIS], however, that there be
who also have seen the pictures he took A few minutes ago the Senator from a quorum call before the amendment is
in Russia-which were a revelation to Minnesota [Mr. HuMPHREY1 said the further considered, so it might be as-
me, and gave me information which amendment deals with a very complex certained whether the chairman of the
otherwise I would not. have had-know matter. It certainly does; in fact, the committee would consider taking the
how beneficial have been his efforts and matter is so complex that we hardly amendment to conference.
his expenditures of time and money. know yet what effect the change of the Mr. STENNIS. Mr. President, I sug
Mr. ELLENDER. I thank the Senator. law which was made in 1956 has had. gest the absence of a quorum.
from Kansas. We have not had time to ascertain how The PRESIDING OFFICER. The
Mr. STENNIS. Mr. President, let me it works; and certainly we are not able clerk will call the roll.
add that I, too, believe that the pictures to tell how this particular amendment The legislative clerk proceeded to call
the Senator from Lquisiana took in the would work. the roll.
course of his travels, particularly the Mr. President, I wish very much that Mr. JOHNSON of Texas: Mr. Press-
ones he took in Russia, will lead to a new the distinguished Senator from Louisi- dent, I ask unanimous consent that the
and better understanding of the Russian ana might have offered the amendment order for the quorum call be rescinded.
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The PRESIDING OFFICER. With-
out objection, it is'so ordered.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I ask unanimous consent that the
order for the yeas and nays be vacated.
The PRESIDING OFFICER. Is there
objection to the request of the Senator
from Texas? The Chair hears none, and
it is so ordered.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I understand the distinguished
chairman of the Committee on Foreign
Relations is willing to take this amend-
ment to conference. In the event the
conferees feel the amendment is work-
able and should be retained in the bill,
the Senator from Rhode Island will do
his best to have it accepted. In the event
the conferees do not -feel it should be-
come a part of the bill, they can :reject
it, which will be satisfactory to the
Senator from Louisiana.
Mr. GREEN. Mr. President, I agree
to take the amendment to conference
under those circumstances.
Mr. WILEY. Mr. President, after
those remarks by the distinguished ma-
jority leader, I ask unanimous consent
to have printed in the RECORD at this'
point a statement provided by the execu-
tive branch in relation to this matter.
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
EXECUTIVE BRANCH POSITION ON SENATOR
ELLENDER'S AMENDMENT (6-5-58-II)
The executive branch is opposed to the
revised amendment on pricing proposed by
Senator ELLENDER (6-5-58-D). On the basis
of an examination by technical experts in
the Office of the Secretary of Defense, it is
believed that the amendment, even as re-
vised, will have the opposite effect from that
intended and will actually result in increased
payments by the military assistance program
to the military departments. Without go-
ing into details of what is a very complicated
and involved subject, the following objec-
tions are made:
1. The amendment is not consistent with
the amendment which was made by the
Congress in 1956 after detailed study within
the executive branch and careful scrutiny by
the Foreign Relations Committee of the
executive branch proposals. As was recog-
nized by the Congress in 1956, a pricing sys-
tem which affects over 3 million stock. num-
ber items cannot be changed all at once.
Time is required to effect a change on so
vast a scale. Moreover, it is difficult, indeed
nearly impossible, to maintain 2 pricing
systems, 1 for military assistance trans-
actions and another for regular Department
of Defense transactions. Pursuant to the
new pricing legislation of 1956, the Depart-
ment of Defense has worked out a compre-
hensive new pricing system which integrates
pricing for military assistance, as directed by
that legislation, with regular military trans-
actions between the military services. As a
result very great savings to the military
assistance programs have already been
to --in s are an-
a r s
9363
ment could not be implemented consistent Mr. CASE of South Dakota, Mr. Pres-
with the system which has developed pur- ident, will the Senator yield?
suant to the National Security Act. Mr. ELLENDER. I yield.
3. The application of the amendment Mr. CASE of South Dakota. The first
would by and large result in the payment of the Senator's amendment com-
of higher prices by the military assistance part
program than it now pays pursuant to the mends itself to me, because, as I have
1956 legislative changes. said on this floor many times, while I
4. The amendment is technically deft- would not eliminate the program under
cient in that it makes no provision as to.. present world conditions, I think we
the pricing of nonexcess items furnished should be moving in the direction of re-
by the military departments from stock but ducing expenditures rather than in-
that which they section 2 must deals replace. only It with will be pricing of noted creasing them. I can readily support the
nonexcess items which do not need to be first part of the amendment offered by
replaced. Section 1 deals with excess and the Senator from Louisiana.
section 3 deals with new procurement ex- However, I do not understand why he
pressly for the military assistance program. should combine that feature with strik-
There is left a gap as to the pricing of non- ing out the transfer clause permitting
excess items which do need to be replaces, transfer between economic and military
since the present sections of the act which aid. I believe that logic would support
cover this category, are to be deleted by the
amendment. leaving in the transfer clause, because it
PRESIDING OFFICER: The provides flexibility with respect to the
The on agreeing to the amend- total President program, which would permit the
question ment offered is by the Senator from Loui- to adjust the aid as between
onomic
some immediate need in the economic
siana [Mr. ELLENDER]. field and some need in the military field.
The amendment was agreed to. Mr. ELLENDER. Let me say to my
Mr. ELLENDER. Mr. President, I call good friend from South Dakota that his
up my amendment designated "6-4- statement may have applied last year;
58-C." but under the present law, defense sup-
The PRESIDING OFFICER. The. port . must be directly connected with
amendment will be stated.for the in- military aid. As I pointed out last year,
formation of the Senate. defense support was used in identically
The LEGISLATIVE CLERK. On page 34, the same manner as foreign aid or grants
lines 15 and 16, it is proposed to strike were used in prior years. However, the
out "$1,800,000,000" and insert "$1,300,- Foreign Relations Committee has seen
000,000." fit to tighten up the use of defense sup-
On page 63, beginning with line 19,. port funds, and has provided that they
strike out all of section 13, through line should be used more for providing food,
2 on page 64. clothing, or other things to support those
The PRESIDING OFFICER. The countries to which military assistance
question is on agreeing to the amend- is given.
ment offered by the Senator from Loui- Mr. CASE of South Dakota. Has not
siana. the Senator two different issues com-
Mr. ELLENDER obtained the floor. bined in one amendment? The first issue
Mr. DIRKSEN. Mr. President, will the is clearly a reduction in dollars.
Senator yield? Mr. ELLENDER: What I am propos-
Mr. ELLENDER. I yield. ing is to allow each appropriation to
Mr. DIRKSEN. What is the number stand on its own feet. I have never
of the amendment? seen any provision in a foreign-aid bill
Mr. ELLENDER. 6-4-58-C. allowing the President to increase one
Mr. DIRKSEN. I thank the Senator. category over the other.
Mr. ELLENDER. Mr. President, the Mr. CASE of South Dakota. But the
purpose of the amendment is to strike transfer clause would not increase the
from the bill in the military assistance total dollars.
section the sum of "$1,800,000,000" and Mr. ELLENDER. I understand that.
to insert in lieu thereof "$1,300,000,000." But under this act the President already
That represents a cut in the military as- has a 10 percent transferability clause.
sistance program of $500 million. In other words, under section 501 of the
In addition, Mr. President, the amend- law as it now stands the President can
ment would strike from the bill section take 10 percent of, let us say, defense
13 which authorizes a transfer of as support, and put it in military aid, pro-
much as $235 million from the defense vided that the 10 percent does not in-
,support portion of the bill to the mili- crease the item to which it is trans-
tary assistance program, or from the ferred by more than 20 percent. Thus
military assistance to defense support. we already have in the law a provision
The bill as reported to the Senate which would give the President authority
provides for the full amount recom- to transfer funds from one section of the
mended by the President in both the program to another.
military assistance and defense sup- Under terms of the bill, if the Appro-
achieved and even gre
g port categories. There is a saving, ac-
If as the new system takes full effect. P
If this amendment were adopted all this cording to proponents of the bill-and,
progress would be brought to a standstill. of course, the bill so provides-of $235
2. The amendment is not consistent with million from the original aggregate
the stock-fund pricing system which has amount for military assistance and for
been set up after a great deal of effect dur- defense support. The amount 'which
ing the past several years by the. Secretary would be provided for military assistance
of 'Defense and the Assistant Secretary of under the amendment I am offering
Defense, Controller pursuant to the author would be-if appropriated-about $40
ity of the National Security Act (and the
1956 changes in the mutual security pric- million less than was appropriated last
ing formula). Indeed the proposed amend- year.
priations Committee should allow the
full amount of $835 million for defense
support, 10 percent of the $835 million
could be transferred to another item,
and in the same manner 10 percent of
the military assistance phase of the
program could be transferred to another
item. So there is transferability already
provided for in the law. I am objecting
to having a separate transferability
provision. I should like the bill to be
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CONGRESSIONAL RECORD - SENATE
specific in providing a certain amount
for military aid and a certain amount
for defense support.. Then the 10-per-
cent clause, under section 501 of the
bill, would remain in the bill, to furnish
the necessary transferability.
Mr. CASE of South Dakota. I under-
stand the point the Senator is making.
However, I see no real objection to the
transfer clause as between the two
funds, unless the Senator wishes to fix
,a ceiling on both of them. But it seems
to me that even if that were, true, he
has combined two different issues in one
amendment. It is a very simple matter
for the Senator from South Dakota to
say that he can support a reduction of
$500 million in the bill; but I should
think that from a practical standpoint
the administration of the bill would be
easier if the transfer clause were not
disturbed. The transfer clause would
take care of any pinch which might be
created by an, overall reduction, and
still there would be the economy of
eliminating $500 million.
Mr. ELLENDER. I come back to the
proposition that what concerns the Sen-
ator has already been taken care of-
that is, the transferability of funds from
one phase of the program to another.
That provision is already in the law.
Why the committee allowed the full
amount in the case of the military
assistance portion of the bill, and the
full amount for defense support, and
then provided for a $235 million trans-
ferability as to the two items is some-
thing,I cannot understand. I cannot
go along with their action. I do not
believe it. should be done that way.
We saw fit, 2 or 3 years ago to allow
the 10 percent transferability clause to
apply to any item; and that provision
will remain in the at. It is not being
disturbed. Under this provision, cer-
tain amounts may be transferred from
one phase of the program to another,
provided the amount transferred does
not add more than 20 percent to the
total of the item to which it is trans-
ferred. .
As to the reason for the proposed cut,
as I pointed out in my opening remarks,
there was available for expenditure on
July 1, 1957, $5,562,090,000. The esti-
mated expenditures for the year 1958 are
$2,200,000,000, thus leaving an unex-
pended balance as of July 1, 1958, of $3,
362,090,000. As I said in my opening
statement, I believe that $1.3 billion for
military assistance is ample, particularly
when the record today shows there is in
the pipeline in excess of $3 billion. In
the first 9 months of this fiscal year, of
the total $1,340,000,000 appropriated last
year, ICA, which administers the MSP,
was able to contract for only $567 mil-
lion. In other words, they were able to
spend only a little over a third of the
amount which was provided for them
last year. Now we have in reserve, in
the pipeline, a huge amount which can
be deobligated at any time it is seen
fit to do so, and applied to other, new
programs if it is so desired.
In my judgment, one of the most ob-
jectionable sections of the military as-
sistance program is the creation of
armies in small countries that cannot
afford them. It does not make sense
to me to saddle small, backward coun-
tries with what would be to them large
armies.
I am not permitted to give the
amounts we have already spent in Iran,
as an example, on what we propose to
spend there in the next 7 or 8 years.
.However, it is sufficient to say it is a
huge sum of money. I visited Iran last
year. It is my opinion that the money
we are spending there is more or less
wasted. We are burdening the Iranian
Government with the expense of trying
to maintain an army to fight Russia.
Such a situation would be like sending a
popgun corps to capture Washington.
The Iranian Army could not do a thing
against Russia. Yet, a good portion of
the money we have appropriated for
foreign aid is going to be used to en-
large the army and put even greater
burdens on the Iranian Government to
maintain that army. I was in Tabriz,
Iran, recently and I have never seen
such abject poverty. I would much pre-
fer to see the money we appropriate
used to help those people economically,
if possible, instead of saddling the Gov-
ernment with an army it cannot sup-
port. That army, in addition, would
not be effective in the event of attack
by an aggressor force. Sitting there on
the periphery of Russia, a few missiles,
fired from well-placed installations
around the border, could destroy prac-
tically all the big cities of Iran. This is
true not only of Iran but of many other
areas in southeast Asia.
Let us consider South Vietnam. That
country is young. It does not have the
capability of maintaining a large army.
Neither does Laos. Although Laos is a
member of the French Union, the United
States is paying for its army's hardware,
food, and clothing. The United States
even pays the family allowances of the
Laotian soldiers. That is how poor Laos
is. Yet we are providing more funds to
set up even larger armies in countries
like that. To my way of thinking, those
armies would be of little or no service-in
the event of any kind of conflict in those
areas.
We have been told in the past that
these armies are being created to put out
brush-fire wars should they start. That
was perhaps a good reason at one time.
However, I am sure that Senators have
read recently that we have made ready
four divisions of our troops to -take care
of situations of that kind. Anyone
knows that if an attack were made today
on South Vietnam, or on Laos, neither of
those countries could hold the invaders
for more than a very short time, accord-
ing to the testimony which was submitted
before the Foreign Relations Committee.
Let me read from the testimony on the
situation in South Vietnam, about which
I have been talking:
Senator SMrrH. Do you feel satisfied mili-
tarily with the situation in South Vietnam,
the Saigon area? What do you have in forces
as against those in North Vietnam and the
Hanoi area?
Admiral STOMP. The North Vietnam or the
Viet-Cong, as they have started calling them,
they used to be Viet-Minh, are much stronger
than the South Vietnam is. They have
about twice as many soldiers on active duty
and besides that in North Vietnam they
June 6
have some reserves of about 200,000, whereas
the South Vietnam Army, as you know, is
about 150,000.
They are much stronger, They have re-
equipped themselves from China, and there
is no doubt that they could march clear
across South Vietnam.
Senator SMITH. You mean from Russia via
China perhaps?
Admiral STUMP. That is right; yes. They
could undoubtedly win a war if we did not
come in to help. But I do think, the
terrain being what it is, that the army of
South Vietnam could delay them long
enough for them to get help from the
outside.
Mr. President, as I said a moment ago,
when military assistance was first begun,
it was to take care of brush-fire wars.
But this objective has obviously been
forgotten. In this connection, the
Washington Post and Times Herald
of March 25, 1958, published an article
entitled "Pentagon Appears To Shift
Emphasis to Planning for .Brush-Fire
Wars." The- article states that four
divisions of United States troops are
being equipped to be sent anywhere in
the world overnight if a brush-fire war
should start.
Why should we spend huge sums of
money in order to equip small armies in,
say, Iran, Vietnam, Laos, of Cambodia-
countries which could not under any
circumstance effectively defend them-
selves? I believe we could well reduce
this amount of military aid and instead
help, if necessary, to provide a local po-
lice force which might beneeded only to
keep peace within the country.
We have assisted France to the point
where it hurts. In past years we have
made available to France more than $8
billion in military aid and economic aid
grants. Notwithstanding that fact,, in
the past we-have provided from 38 per-
cent to 44 percent of the'cost of main-
taining armies in the area of France.
Mr. CHAVEZ. Mr. President, will the
Senator yield on that point?
Mr. ELLENDER. I yield.
Mr. CHAVEZ. The reason for provid-
ing military aid to France is that France
is a member of NATO. Is not that
correct?
Mr. ELLENDER. Yes; that was the
reason.
Mr. CHAVEZ. That was the so-called
justification. But instead of using the
military aid for NATO, France is using
it now to kill Algerians and Tunisians in
Africa.
Mr. ELLENDER. That was the
point I was approaching. I visited
France on 2 or 3 occasions. I have vis-
ited practically all of the NATO coun-
tries in the past 3 or 4 years.
What we have in Western Europe
today as a shield is nothing more or less
than paper divisions. There are a few
active divisions, but very few. Today,
almost half of the active divisions in
Western Europe are from the United
States. Yet as originally planned under
NATO only one-fourth or one-fifth of
the troops were to be from the United
States, while the rest were to be. from
other NATO members. Instead, reduc-
tions have been made to the point where
now our soldiers, if an attack were made,
would be in serious danger. They are
defending Europe almost alone and
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 1 958 CONG
tack should the worst come. to be relieved of a portion 'of this heavy to this point? One of tSle contracts was` for
As the distinguished Senator from burden. We cannot, possibly continue tQ-,, the Gloster Javelin airplane. It was firmly
New Mexico pointed, out, the ammuni- spend money at te rate we are npw programed, and programed in good faith by
tion, guns, and some of the airplanes sending and still hope to survive. The ourselves and the recipients, and by the pro-
tion, ducers. However, as s ththe development t of the
sent to defend Western Europe have
been used in north Africa in recent days
to make more trouble for us.
Newspapers have contained many ar-
ticles recently concerning the with-
drawal of troops from Western Europe
by the United Kingdom. More than
30,000 soldiers are to be withdrawn from
that area, leaving the United States to
hold the bag, to a large extent.
Notwithstanding the fact that West-
ern Europe today is in better shape eco-
nomically than it has ever been, we are
providing $519,500,000 in this bill for
assistance to Western Europe. I think
such a situation is shameful.
The purpose of the Marshall plan has
been accomplished, yet the United States
continues to provide assistance to these
countries.
I think we have . reached the point
where we should examine our foreign
policy, to see if we cannot get those peo-
ple whom we have helped in the past to
assist us' in. keeping the free world
strong. If they could be convinced to do
amount of money which was appropri-
ated to operate the entire Government
when I first came to Congress 22 years
ago was just about what is now required
to pay the interest on the national debt.
Any person with commonsense knows,
that we cannot maintain our spending
rate and expect to survive. Unless we
call a halt to this program and get other
nations to realize that the battle against
communism is as much their burden as it
is ours, we cannot be successful in bring-
Ing about the permanent peace which ,all
of us so desire.
Mr. President, I ask unanimous ,con-
sent to have printed at this point in the
RECORD a. table printed in the hearings
of the Senate Foreign Relations Commit-
tee on the Mutual Security Act of 1958
showing our contribution to NATO and
the European countries aggregates a
total of $737.4 million and $519.5 million,
respectively, for fiscal year 1959.
There being no objection, the table was
ordered to be printed in the RECORD, as
follows:
}J' xHIBIT B
NATO area programs, fiscal years 1958 and 1959
[Million dollars]
Fiscal year
Fiscal year
Fiscal year
1958 NATO
1959 NATO
1950 Europe
program
program
program
Materiel and training:
Conventional materiel and training (country pfograms)------------
334.7
307.8
206.6
Missiles and alreraft modernization--------------------------------
282.1
226.3
131.6
Other materiel (spares, packing, crating, handling, and transporta-
tion, repairs, and rehabilitation) ---------------------------------
84.3
75.8
53.8
Subtotal------------------------------------------------------
701.1
609.9
392.0
Cost sharing:
Mutual weapons development-------------------------------------
40.0
40.0
Facilities assistance ---- ______________________---------------
20.0
20.0
Infrastructure_________ _ _____ __________________________________
65.0
60.0
-
International military headquarters--------------------------------
6.5
7.5
Subtotal-------- -........ .... ............----?-...-.--?--.---
131.5
127. 5
--------------
Total-_.1-------------------------------------------------------
832.6
737.4
_?-.? -
Mr. ELLENDER. Mr. President, at
this point I would like to say a few words
about the Development Loan Fund.
Last year we appropriated $300 million
for this fund and authorized an addi-
tional $625 million fqr this year.
In my judgment this is nothing more
or less than an internation Reconstruc-
tion Finance Corporation. However, 10
years later, we are finally getting around
to following the advice of General Mar-
shall. In outlining his plan to help Eu-
rope to help itself, General Marshall sug-
gested that loans be extended to war-
ravaged areas. You notice he said
nothing of grants. He spoke of loans.
Now, 10 years after the start of the
Marshall plan, the Development Loan
Fund is about to go into action and offer
loans to help people help themselves.
Mr. President, getting away from the
Development Loan Fund, I would now
like to discuss one phase of the pipeline.
In 1954, money was earmarked for the
modernization of the British Air Force.
Yet, this money is now being used to de-
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fray the cost of installing IRBM squad-
rons and other missile programs. To
my mind, this is something which the
British ought, at least, help us do; but
we are doing the whole job.
I ask unanimous consent that the
statement from the hearings on this sub=
ject be printed at this point in the
RECORD.
There being no objection, the state=
ment was ordered to be printed in the
RECORD, as follows:
EXHIBIT D
Mr. SPRAGUE. * * * There is available to-
day $112 million of prior-year funds which
we can use against the cost of the [deleted]
IRBM squadrons which will be deployed in
England commencing with the first squadron
in December of 1958. The total cost to the
'United States of these [deleted] squadrons
is expected to reach approximately [deleted]
million dollars, including training missiles
and Craning equipment.
* * *
The CHAIRMAN. You do not think too
much was appropriated for the purpose then
enumerated? -
airplane and the production had started and
got along, it was found that it was not suit-
able for the purpose for which it was de-
signed.
The other aircraft concerned in this pro-
curement was the Hawker Hunter, which did
come along the way it was designed, and went
into production and was satisfactory. Un-
fortunately the British, in a white paper,
cut down the extent ofitheir air force as they
had planned it when the airplanes were pro-
gramed.
Mr. ELLENDER. Mr. President, in-
cluded in this military assistance item
is one for mutual weapons development.
It is all very well for us to spend a total
of approximately $8 billion for research
and development in our own Defense
Department. But, in addition, now we
are being asked to pay half of the amount
for mutual weapons development in
Europe. In addition jo paying this one-
half of the cost of that program, which
amounts to $40 million, we are also pro-
viding 50 percent of the cost of the fa-
cilities assistance program.
In other words, we pay to develop the
'Implements of war. Then we provide 50
percent of the cost for tooling the fa-
cilities. As I have said, in view' of the
fact that we have been so generous with
these countries during the past 10 years,
and in view of the further fact that their
economies now are an average of 168
percent of their prewar level, it seems to
me they should be able to handle an
Item of this kind by themselves. How-
ever, our foreign-aid administrators of-
fer them this assistance,'and of course
they accept it. As I have said before and
I will say again, they will continue to
lean on us as long as we permit them
to do so.
Mr. President, this Item also relates to
our dealings with the countries of
Western Europe. I recall that 2 or 3
years ago, when the boast was made that
our economic aid to Europe had. ceased,
it was replaced with what was called off-
shore procurement. During the last 3
or 4 years we have provided in the
neighborhood of $3 billion for this pur-
As I recall, there was an understand-
ing that these plants would be placed
on a standby basis. But evidently such,
was not the case, since we are still pro-
viding facilities assistance in this bill.
I believe it is shameful for the United
States to spend money in this way.
Mr. ? President, at this time I wish to
call attention to what we are doing in
Laos, a small country of less than two
million population, with few assets, and
without sufficient money to run their
Government. In that connection I shall
read from the testimony taken at the
hearings of the Senate Foreign Relations
Committee, as it appears on page 41:
Question. Are we still providing troop pay
and family allowances of the Lao Army?
If we are, are we following the same proce-
dure in other areas?
Answer. A portion of United States assist-
ance to Laos is for the purpose of paying
troops, including family allowances. In
other countries the ,situation is quite dif-
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9366 CONGRESSIONAL RECORD -SENATE a
ferent: In such countries United States
assistance is not foFthe purpose of support-
ing troop pay and family allowances. Such
assistance rather is intended to help the
receibing country, to import the commodities
and services needed by its economy in order
to sustain the desired level of military ac-
vity or otherwise to make it possible for
,,the country to make the contribution to the
coiri]non defense which is the purpose of
,del nse support. In such countries, how-
local currencies resulting from the im-
,portation of the goods and services are de-
posited eit)aer in an account belonging to
such countries or, in the case of surplus
agricultural commodities, in an account
owned by the United States. A portion of
such local currencies is attributed, to the
support of the defense budget in such coun-
tries. Beyond the contribution to the de-
fense budget it is frequently not useful to
carry the attribution to the exact uses of
such local currency. However, it would not
be -inaccurate and in some cases, such as
Vietnam, it Is quite clearly accurate to say
that 'a portion of the contribution to the
defense budget may find its way into troop
pat and family allowances. Such countries
Include Cambodia, Vietnam, Korea, Greece,
.Pa4istan, and Turkey.
In addition, a contribution is made to the
support of the general budget of Jordan as
a result of which it would be reasonable to
assume that some of this contribution
might find its way into troop pay and family
allowances.
Mr. President, I ask unanimous con-
sent that other excerpts from the testi-
mony taken at, the hearings be printed
at this pot in the RECORD, as part of
my remarks.
There being no objection, the excerpts
were ordered to be printed in the REC-
ORD, as follows
SUPPORT OF LAO MILITARY FORCES
?
The CHAIRMAN. Very well. Have you any
questions, Mr. Fulbright?
Senator FULBRIGHT, Yes. Admiral, I no-
tice that the Presentation Book says that we
bear the entire cost of supporting the Lao-
tian army. It says the average annual cost
of maintaining military personel for Laos is
$867 per person compared to $719 for Cam-
bodia, $245ifor Thailand, and $147 for Tai-
wan. Why- is it that we bear the entire
costof personnel in Laos?
Admiral STUMP. Mainly, sir, because Laos
.does not produce anything that it can send
Bout. It is a wild country with only 2 mil-
lion people in it, the most sparsely popu-
lated country in southeast Asia; 95 percent
of them cannot read or write. They did not
even have any banks there. There wasn't a
-bank there until 3 years ago. Therefore,
.-they have no way of raising money to buy
the things that are required by a military
force. None is produced in Laos. There-
fore, if they are going to have any army-
they have an army of [deleted] sifnply all
the money for them has got to come from
the United States. They cannot raise it
locally.
Senator FULBRIGHT. [Deleted.] What do
the French have to do with the Lao Air
Force?
Admiral STUMP. The French are still there
in Laos. Laos is still a part of the French
Union. [Deleted.]
Senator FULBRIGHT. Does the French Gov-
ernment nominally have control of Laos?
Admiral STUMP, No, sir. It is independ-
ent, but closely tied to France through the
French Union._.
Senator FULBRIGHT. DO the French con-
tribute anything to the support of the
army?
Admiral STUMP. Yes, they do. Have we
got a figure on that?
Captain GREEN. No, sir, I haven't got a
figure. They do contribute.
Admiral STUMP. They have a training
mission and they pay the expenses of that
training mission. I do not think they fur-
nish money for any equipment.
Senator FULBRIGHT. Is it correct that they
furnish no money to support the Lao Army
Itself, but only to their own mission?
Admiral STUMP. That is correct.
Senator WILEY. How much Is infrastructure
this year?
Mr. JANOREY. Sixty million dollars.
Senator WILEY. What have we spent on in-.
frastructure since the war?
General GUTHRIE. Actual expenditures
through fiscal year 1957 were $392 million.
The estimated total for fiscal year 1957 is
$70 million. That includes airfields, com-
munications, POL storage, naval bases, head-
quarters, and training installations. They
are fixed military facilities and when shared
out, the United States percentage of the
total is in the neighborhood of 38 percent of
Whatever the entire project costs.
OFFSHORE PROCUREMENT
Since there has been some discussion about
offshore procurement, we thought It might
be of interest to the committee to indicate to
you gentlemen what our record has been in
the offshore procurement field.
In the early days of this program, there
were various reasons why we wanted to try
and maintain and promote the industry of
our various NATO partners, keep the aircraft
industry going, for instance, in France and
Italy and in the United Kingdom.
A good many offshore procurement con-
tracts were placed in the interest of ac-
complishing that, and also to expand the
mobilization base in case we should need to
use it in time of war, in time of emergency.
Since that time, we have leveled out.
Another thing we tried to'do in putting
these offshore procurement contracts abroad
was to try and get these people in a position
where they could better help themselves.
In other words, in order to get them going in
maintaining spare parts and in making these
various things that we knew they would need
on a continuing basis, our offshore procure-
ment program was designed as a pump-prim-
ing operation with the hope that after the
pump was primed, they would pick up-
The CHAIRMAN. I should think in all of
these agreements you would provide for the
eventuality that these machines would be-
come obsolete before the spare parts can be
manufactured.
Mr. SNUFF. This was a consideration.
However, a good many of them have kept on.
As a result of that, our contracts have fallen
off until now we are something under $100
million, so we are asking $99 million for 1959
for this program:
OFFSHORE PROCUREMENT
It Is United States policy that offshore
procurement will not be undertaken if it
will (1) have serious adverse effects on the
United States production base; (2) result
in unjustifiable price differentials In, com-
parison with United States supply of similar
type items; (3) result in failure to meet
United States delivery 'objectives; or (4)
jeopardize security interest of the United
States.
Offshore procurement has rapidly declined
In recent years due to the changing nature
of MAP naterlel requirements and the vital
need for retaining orders In the United
States to sustain the domestic military pro-
duction base. The result of these changed
factors is readily apparent from chart X,
,where it, can be seen that contracts placed
have been reduced from a total of $1.6 bil-
lion in fiscal year 1953 to an estimated $112
million in fiscal year 1958, while expendi-
tures have decreased from a -maximum of
$668 million in fiscal year 1956 to an esti-
mated $229 million in fiscal year 1958.
Current qffshore procurement is restricted
to items which must be of foreign types to
support foreign equipment; items no longer
produced In the United States; arrange-
ments whereby the producing country con-
tributes a substantial portion of the costs
involved, and similar circumstances.
I would like to say a word about the pro-
gram proposed for Europe for fiscal year
1959. Once more we are requesting funds
for what is essentially a military and defense
support program. Of the approximately
$281 million proposed for Europe, $251 mil-
lion is related directly to defense, that is,
$206.5 million for military assistance shown
in European country programs plus $45
million for defense support. These figures
do not tell the whole story, however. As
in previous years, much of the proposed mil-
itary assistance can only be planned at this
early stage of the programing process on
a global basis. Such items as missiles, air-
craft modernization, and spare parts (de-
scribed in the presentation book on "Non-
regional Programs" under the heading "Spe-
cial Materiel Programs") add substantially
to the military program when broken down
by region and by country. While the coun-
try allocations are very tentative at this
time, the total thus developed for Europe
(shown on p. 7 of the presentation book,
"Europe and Africa") amounts to $185 mil-
lion, bringing the total proposed military
aid program for Europe to about $392 mil-
lion. The great bulk of the $185 million ad-
ditional increment, in the case of the Euro-
pean countries, Is intended missiles in order
to carry forward the modernization of NATO
forces which has been underway since 1956
and which is so important to General Nor-
stad's defense plans and our own security.
Mr. ELLENDER. Mr. President, in-
cluded in this amount is money to be
used to pay for the support of the U. N.
troops in Korea, other than our own,
In other words, the United States is not
only paying for the maintenance of its
own divisions in Korea, but also for the
maintenance of the 20-odd divisions of
the ROK, and also for the maintenance
of a comparatively small number of
troops stationed there by Britain,
Turkey, Greece, and the Philippines. I
believe it is shameful that the United
States should provide as much as $12
million to support those troops.
Concerning this item, I quote the fol-
lowing from the committee hearing:
The CHAIRMAN. Are there any other United
Nations forces still in Korea?
Admiral STUMP. Yes, there are, but just
token forces.
The CHAIRMAN. Which countries?
Admiral STUMP. I would like to check that.
Thailand, Turkey, and the United King-
dom have small forces. The Philippines has
representation in the honor guard.
The CHAIRMAN. Is the United Kingdom the
only one?
Admirar STUMP. No, sir. Thailand, Turkey,
United Kingdom, and the Philippines. Most
of those forces have been reduced to such
a small number that they are really just
token forces to show their continued unity
with the United Nations in the job they are
'oing.
The CHAIRMAN. Then the United States is
the only one that has more than token
forces?
Admiral STUMP. Yes, sir; we have two divi-
sions there. Turkey has a brigade.
The CHAIRMAN. I won't ask any more ques-
tions now. I will defer them until later.
Mr. President, as I have just stated, in
order to take care. of these token forces,
we are providing $12 million in this bill.
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1958 . - CONGRESSIONAL RECORD - SENATE .9367
Of all the ridiculous things, Mr. Presi- These programs will be discussed with you ana reducing Military assistance b
dent. I do not know how our represent- by our regional directors. y by $500
million be rejected.
atives abroad can think of the many The remainder was deleted because Mr. ELLENDER. Mr. President, I
ways they find to spend our money. the information was more or less secret. simply wish to point out again that if my
Another item included in the military Why in the name of commonsense pending amendment is adopted, and if
assistance appropiration is the nutri- should we be spending money in order the amendment I shall propose in a few
tional survey. In 1957, we provided to teach people in France, England, or moments is adopted, the same amount of
$202,000 for this program ; for 1958, anywhere, else in the world, how to deal money which they received last year will
$210,000; and in this bill there is $275,- with communists? It strikes me that be available for Korea and Formosa.
000 to perpetuate the program. This is is. the business of the people in the Mr. GREEN. I am commenting on
something that should, be borne by the countries concerned. They ought to be what the Senator has already proposed
people of the countries concerned, Even the ones to do it. Nevertheless, nego- and said. I have no idea what he has in
though this amount is small, why should tiations are presently underway to use mind to propose for the future.
we be burdened with such an expendi- a total of $49 million, and $10 million The PRESIDING OFFICER (Mr. PAs-
ture? It strikes me that our adminis- is being provided on account in this bill. TORE in the chair). The question is on
trators are simply looking for ways and Mr. President, I do not intend to go agreeing to the amendment of the Sena,.
means to spend our money. into any more detail. I simply wish to tor from Louisiana [Mr. ELLENDER].
Mr. President, I ask unanimous con- reiterate that in the amount of $1,800 Mr. HUMPHREY. Mr. President, I
sent to have the justification for this million, certain programs are included suggest the absence of a quorum.
item printed in the RECORD at this point. which could and should be undertaken The PRESIDING OFFICER. The
There being no objection, the excerpt by the local people. I 'clerk will call the roll.
was ordered to be printed in the RECORD, Mr. President, I yield the floor. The legislative clerk proceeded -to call
as follows: Mr. GREEN. Mr. President, the the roll.
NUTRITION PROGRAM-MILrrARY,ASSISTANCE amendment offered by the senior Sena- Mr. HUMPHREY. Mr. President, I
The ultimate objective of this program is tor from Louisiana [Mr. ELLENDERI re- ask unanimous consent that the order
to assist friendly countries in the establish- duces the authorization for military as- for the quorum call be rescinded.
mggnt of permanent nutrition services within sistanee from $1.8 billion to $1.3 billion.' The PRESIDING OFFICER (Mr.
tFieir armed forces. This will involve the This is an overall reduction in the CLARK in the chair). Without objection,
training of local personnel in modern tech- amount authorized by the amount of it is so ordered.
niques of study and analysis In the field of $500 million. Mr. HUMPHREY. Mr. President, I
nutrition technology and subsequently the On behalf of the Committee on For- ask for the yeas and nays on this amend-
transfer to them of basic laboratory equip- eign Relations, I wish to oppose this ment.
merit and supplies used in the surveys. Since January 1956r, nutrition surveys have amendment.' . I suggest to the Senator The PRESIDING OFFICER. Is there been completed in Iran, Pakistan, Korea, from Louisiana that if he wishes to re- a sufficient second?
Philippines, Turkey, and Libya. As a part duce the amount of money for mili- The yeas and nays were pxdered.
of the fiscal year 1958 program, full surveys tary hardware, this is a sybject more The PRESIDING OFFICER. The
will be made in Spain and Greece, the first properly taken up with the Senate Com- question is on agreeing to the amendment
stage survey will be conducted in Ethiopia mittee on Appropriations. of the Senator from Louisiana [Mr. EL-
and follow-up work will be undertaken in The Committee on Foreign Relations LENDER]. On this question the yeas and
Iran and Libya. These projects, together
with other plans not. yet finalized, will has already reduced by $235 million the nays have been ordered, and the clerk
amount to $208,000, sums authorized for military assistance will call the roll.
Continuance of. the nutrition program for and defense support. I do not believe The legislative clerk proceeded to call
fiscal year 1959 will cost $275,000 for initial these amounts should be reduced the roll.
survey in two additional countries and fol- further. Mr. GOLDWATER (when his name
low-up work in the Philippines, Pakistan The bulk of the military assistance was called). On this vote I have a pair
Libya, Spain, Greece, and Ethiopia. This funds which would be affected by the with the senior Senator from California
program represents a comparatively small proposed cut would be in the areas of the [Mr. KNOWLAND]. If he were present
expenditure in order to help insure through Far East, the Middle East, and South and voting he would vote "nay." If I
technical advice that the users of MAP
equipment, which represents an investment Asia. If this additional cut of $500 mil- were at liberty to vote I would vote "yea."
many times as great, will be physically quasi- lion were accepted by the Senate, it I therefore withold my vote.
lied to carry out their assigned missions. would be necessary for the President to Mr. McCLELLAN (when his name was
Programs reduce the military assistance we are called). On this vote I have a pair with
[In thousands of dollars] now giving to countries bordering on the the senior Senator from Florida [Mr.
Fiscal year 1957 -------------- ------- 202 Soviet Union or Communist China, such HOLLAND]. If he were present and vot-
- - ,,. - -- - -
' dition of the world is not such as to
[In thousands of dollars]
Pro-
Ex-
Un-
Military assistance
gramed
pendi.
liqui-
tures
dated
Cumulative June 30, 1957_____
2,52
51
201
Estimate fiscal year 1958______
210
_____:_
Cumulative June 30, 1958_____
402
51
411
Mr. ELLENDER. Mr. President, there
is also in the military assistance pro-
gram an amount of $10 million for the
overseas internal security ,program. I
cannot understand why we should be
strapped with this burden.
Reading from page 94 of the. hear-
ings:
Many countries lack, knowledge, training,
or means to defend themse'ves successfully
against Communist pressure and penetra-
tion. This amount supplements with mili-
tary aid an.ICA program to assist them in
resisting Communist subversion.
You will note on the, chart that we have
$49 million for programs under negotiation
warrant any such massive reduction in
military assistance to these key coun-
tries.
In 1950 we learned the lesson of un-
preparedness. There had been such a
substantial reduction in the size of the
armed forces of the free world that
Communist-controlled North Korea felt
our lack of defenses was such as to in-
vite military attack on South Korea. As
a consequence more than 100,000 Ameri-
can casualties resulted from the efforts
of the free world to prevent Communist
If I were at liberty to vote- I
would vote "yea." I therefore, withhold
my vote.
The rollcall was concluded.
Mr. I IANSFIELD. I announce that
the Senators from Virginia [Mr. BYRD
and Mr. ROBERTSON], the Senator from
Delaware [Mr. FREAK], the Senator from
Florida [Mr. HOLLAND], the Senator from
South Carolina [Mr. JOHNSTON], the
Senator from Oklahoma [Mr. KERR], the
Senator from Louisiana [Mr. LONG], the
Senator from Montana [Mr. MURRAY],
the Senator from Wyoming [Mr.
O'MAHONEY],-the Senator from Missouri
aggression. I feel sure, Mr. President, [Mr. SYMINGTON], and the Senator from
that if the United States begins now to Texas [Mr. YARBOROUGH] are absent on
reduce substantially the military assist- official business,
ance which it gives to the countries on I further announce that if present and
the borders of the iron and bamboo cur- voting, the Senator from Virginia [Mr.
tains, there is great danger that our ac- BYRD], the Senator from South Carolina
tion will be construed as a lack of [Mr. JOHNSTON], the Senator from Okla-
interest in the preservation of the rode- homa [Mr. KERR], the Senator from Lou-
pendence of those countries. isiana [Mr. LONG], the Senator from
I ask, therefore, Mr. President,that the Montana [Mr. MURRAY], the Senator
amendment of the Senator from Louisi- from Virginia [Mr. ROBERTSON], and the.
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9368 CONGRESSIONAL RECORD - SENATE June 6
Senator from Texas [Mr. YARBOROUGH] The PRESIDING OFFICER (Mr. ment would reduce the maximum milt-
would each vote "yea." CHURCH in the chair). The question is tary aid authorization from $1,800 mil-
On this vote the Senator from Dela- on agreeing to the motion of the Sena- lion to $1,600 million. The effect of the
,ware [Mr. FREAR] has a pair with the tor from Alabama. amendment would be to place a ceiling of
Senator from Missouri [Mr. SYMINGTON]. The motion to lay on the table was $1,600 Million on military assisance.
If present and voting the Senator from agreed to. In addition, it would leave section 13
Delaware [Mr. FREAR] would vote "yea" Mr. ELLENDER. Mr. President, I unchanged. My previous amendment
and the Senator from Missouri [Mr. send an amendment to the desk and ask would have deleted that section.
SYMINGTON] would vote "nay." thatit be stated. Mr. SPARKMAN. What it does is it
Mr. DIRKSEN. I announce that the The PRESIDING OFFICER. The places a ceiling on military expenditures
Senator from Wyoming Mr. BARRETT], amendment will be stated. at the same level as last year. Is that
the Senator from New York [Mr. IVES], The LEGISLATIVE CLERK. On page 34, correct?
the Senator from Pennslivania [Mr. lines 15 and 16, it is proposed to strike Mr. ELLENDER. That is correct.
MARTINI, and the Senator from Kansas out "$1,800,000,000," and insert in lieu Mr. HUMPHREY. I believe the Sena-
[Mr. SCHOEPPEL] are absent on official thereof "$1,600,000,000." tor's amendment is a sound amendment,
business. Mr. ELLENDER. Mr. President, I am and is one that some of us wished to
The Senator from New Hampshire not going to detain the Senate very long support in the committee.
[Mr. COTTON], the Senator from West in discussing this amendment except to Mr. ELLENDER. I thank the Senator.
Virginia [Mr. REVERCOMB], and the Sen- say that it would cut military aid by $200 SEVERAL SENATORS. I Vote! Vote!
ator from Massachusetts [Mr. SALTON- million. I sought to reduce this author- The PRESIDING OFFICER. The
STALL] are necessarily absent. ization by $500 million a moment ago. question is on agreeing to the amend-
The Senator from Ohio [Mr. BRICKER], The transferability clause appearing ment offered by the Senator from Lou-
the Senator from Vermont [Mr. FLAN- on page 63-section 13 of the bill will isiana [Mr. ELLENDER]. The yeas and
DERS], the Senator from Iowa [Mr. MAR- remain in the bill,, unchanged. nays have been ordered, and the clerk
TIN], and the Senator from Michigan Therefore the maximum authoriza- will call the roll.
[Mr. POTTER]: are detained on official tion provided for military aid would The Chief Clerk proceeded to call the
business. be the same as that of last year. roll.
If present and voting, the Senator I ask for the yeas and nays. Mr. GOLDWATER (when his name
from Wyoming [Mr. BARRETT], the Sena- The yeas and nays were ordered. was called). On this vote I have a pair
tor from Iowa [M'r. MARTIN], the Senator Mr. SPARKMAN. Mr. President, will with the senior Senator from California
from New York [Mr. IVES], the Senator the Senator yield? [Mr. KNOwLAND]. If he were present
from Michigan [Mr. POTTER], the Sena- Mr. ELLENDER. I yield. and voting, he would vote "nay"; if I
tor from Massachusetts [Mr. SALTON- Mr. SPARKMAN. Could the Senator were permitted to vote, I would vote
STALL] and the Senator from Kansas tell us briefly what effect his amend- "yea." I withhold my vote.
[Mr. SCHOEPPEL] would each vote "nay." ment would have on the overall amount? Mr. McCLELLAN (when his name was
The Senator from California [Mr. May I put it this way? As I understand, called). On this vote I have a pair with
KNowLAND1 is detained on official busi- the only effect of the Senator's amend- the senior Senator from Florida [Mr.
ness and his pair has been previously ment would be to limit the military ex- HOLLAND]. If he were present, I under-
announced by the Senator from Arizona penditures to $1,600,000,000. Is that stand he would vote "nay"; if I were per-
(Mr. GOLDWAtERI. correct? mitted to vote, I would vote "yea."
The result was announced' yeas 24, Mr. ELLENDER. That is exactly cor- Therefore, I withhold my vote.
nays 46, as follows: rect. That is the same amount that was Therollcall was concluded.
YEAS-24 authorized last year. Mr.. MA14SFIELD. I announce that
Mr. SPARKMAN. What effect would the Senator from Virginia [Mr. BYRD],
Anderson Ellender Morse
Bible Ervin Proxmire it have on the overall amount? 'the Senator from Delaware [Mr. FREARI,
Butler Fulbright Russell Mr. JOHNSON of Texas. Mr. Presi- the Senator from Florida [Mr. HOLLAND],
Case, S. Dak. Hruska Stennis dent, may we have order? the Senator from South Carolina [Mr.
Chavez Jenner Talmadge The PRESIDING OFFICER. The JOHNSTON), the Senator from Oklahoma
Dworshak Curtis J Laordannger Williams Thurmond Senate will be in order. [Mr. KERR], the Senator from Louisiana
Eastland Malone Young Mr. SPARKMAN. What effect would [Mr. LONG], the Senator from Montana
NAYS-46 it have as compared with the bill re- [Mr. MURRAY], the Senator from Wyo-
Aiken Green Monroney ported by the committee? ming [Mr. O'MAHONEY], the Senator
Allott Hayden Morton Mr. ELLENDER. `It would reduce the from Virginia [Mr. ROBERTSON], and the
Beall Henninggs Mundt maximum amount authorized for milt- Senator from Texas [Mr. YARBOROUGH]
Bennett Hickettlo.per Neuberger
Bridges Hill Pastore Lary assistance by $200 million. The are absent on official business.
Bush Hoblitzell Payne transferability would remain at $235 mil- I further announce that if present and
Capehart Humphrey Purtell lion, as would the combined $2.4 billion voting, the Senator from Virginia [Mr.
Carlson Jackson Smathers ceiling for military aid and defense sup- BYRD], the Senator from Delaware [Mr.
Case. Carroll
N. J. John s Joson, Tex. Smith, Smith, N. J. Maine port. FREAR], the Senator from South Carolina
n
Church Kerauver Sparkman Mr. SPARKMAN. Does it affect eco- [Mr. JOHNSTON], the Senator from Okla-
Clark Kennedy Thye riOmtC aid in any way? Noma [Mr. KERR], the Senator from
cooper ausche Wiley Watkins Mr. ELLENDER. It does not affect Louisiana [Mr. LONG], the Senator from
Dirksen Lausch
Douglas Magnuson defense support. Montana [Mr. MURRAY], the Senator
Gore McNamara Mr. JOHNSON of Texas. Mr. Presi- from Virginia [Mr. ROBERTSON], and the
NOT VOTING-28 dent, may we have order? Senator from Texas [Mr. YARBOROUGH]
Barrett Johnston, S. C. O'Mahoney
Bricker Kerr Potter The PRESIDING OFFICER. The would each vote "yea." Byrd Knowland Revercomb Senate will be in order so that the col- Mr. DIRKSEN. I announce that the
Senator from Wyoming [Mr. BARRETT],
Cotton ng Robertson loquy between the Senator from Ala-
Flanders Mansfield Saltonstall bama and the Senator from Louisiana the Senator from New York [Mr. IVES],
Frear Martin, Iowa Sel the Senator from Pennsylvania [Mr.
Goldwater Martin, Pa. Symington 'may be heuxd. The Senate will be in MARTINI, and the Senator from Kansas
Holland McClellan Yarborough order. No further proceedings will occur MARTI
Ives, Murray until the Senate is in order, so that the [Mr. SCHOEPPEL], are absent on official
So Mr. ELLENDER'S amendment was colloquy may be heard. 'Attaches of the business.
rejected. Senate will please refrain from conversa- The Senator from New Hampshire
Mr. HUMPHREY. Mr. President, I tion; and, in failure to do so, they will [Mr. COTTON], the Senator from West
move that the Senate recoi1sider the please leave the Chamber. Virginia [Mr. REVERCOMB], and the Sena-
vote by which the' amendment was re- Mr. ELLENDER. As I have indicated, tor from Massachusetts [Mr. SALTON-
jected. the amendment now pending is inlan- STALL] are necessarily absent.
Mr. SPARKMAN. Mr. President, I guage similar to that which the Senate The Senator from Ohio [Mr. BRICKER],
move to lay that motion on the table. rejected, except that the pending amend- the Senator from Vermont [Mr. FLAN-
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CONGRESSIONAL RECORD - SENATE
DERs]',, the Senator from Iowa [Mr.
MARTIN], and the Senator from Michigan
[Mr. POTTER] are-detained on official
business.
If present and voting, the Senator
from Iowa [Mr. MARTIN], the Senator
from New York [Mr. IVES], the Senator
from Michigan [Mr. POTTER], and the
Senator from Massachusetts [Mr.
SALTONSTALL] would each vote "nay."
The Senator from Kansas [Mr.
SCHOEPPEL] is, paired with the Senator
from Wyoming [Mr. BARRETT]. If pres-
ent and voting, the Senator from Kansas
would vote "yea," and the Senator from
Wyoming would vote "nay."
The Senator from California [Mr.
KNOWLAND] is detained on official busi-
ness, and his pair has been previously
announced by the Senator from Arizona
[Mr. GOLDWATER]. I
The result was announced-yeas 43,
nays 28; as follows:
YEAS-43
Anderson Hennings Mundt
Bible Hill Pastore
Butler Hruska Proxmire
Carroll Humphrey Russell
Case, S. Dak. Jackson Smathers
Chavez Jenner Sparkman
Church Johnson, Tex. Stennis
Curtis Jordan. Symington
Douglas Kefauver Talmadge
Dworshak Kennedy Thurmond
Eastland Langer Watkins
Ellender Magnuson Williams
Ervin Malone Young
Fulbright Monroney
'Gore Morse
NAYS-28
Aiken Cooper Morton
Allott Dirksen Neuberger
Beall Green Payne
Bennett Hayden Purtell
Bridges Hickenlooper Smith, Maine
Bush Hoblitzell Smith, N. J.
Capehart Javits Thye
Carlson Kuchel Wiley
Case, N. J. Lausche
Clark McNamara
NOT VOTING-25
Barrett Johnston, S. C. O'M honey
Bricker Kerr Potter
Byrd Knowland Revercomb
Cotton . Long Robertson
Flanders Mansfield SaltonstalI
Frear Martin, Iowa Schoeppel
Goldwater Martin, Pa. Yarborough
Holland McClellan
Ives Murray
So Mr. ELLSNDER'S amendment was
agreed to.
Mr. HUMPHREY. Mr. President, I
move to reconsider the vote by which the
amendment was agreed to.
Mr. JOHNSON of Texas. Mr. Presi-
dent, I move to lay that motion on the
table.
The PRESIDING OFFICER. The
question is on agreeing to the motion of
the Senator from Texas to lay on the
table the motion of the Senator from
Minnesota to reconsider.
The motion to lay- on the table was
agreed to.
The PRESIDING OFFICER. The
bill is open to further amendment.
Mr. ELLENDER. Mr. President, I had
intended to submit an amendment which
would reduce the amount for defense
support; but in view of the fact that
the Senate has agreed to the last amend-
ment, and since I know that an amend-
ment to reduce defense support would
fail, I shall not present my defense sup-
port amendment.
No. s1-10
I now call up my amendment desig-
nated 6-4-58-E and ask that it be stated.
The , PRESIDING OFFICER. The
amendment. will be stated.
The CHIEF CLERK. On page 44, begin-
ning with line 15, it is proposed to strike
out down through line 15 on page 45.
Renumber subsections of section 8 ac-
cordingly.
Mr. ELLENDER. Mr. President, the
effect of this amendment is to strike from
the bill the $200 million contingency
fund. My reason for doing so is very
simple.
Last year} a special Presidential fund
was provided, aggregating $225 million.
It included functions for which two funds
are sought this year-that is, the $212
million special assistance fund and the
$200 million contingency fund, which my
amendment would strike.
Under the bill, as I understand st-
and if any Senator differs with me, I
wish he would say so-the President has
the authority to transfer, and for any
purpose he might desire-$1,283,000,000.
That figure is derived in this way:
Money now in the pipeline and not
obligated, but reserved for spending.
In regard to that amount of money,
the President has authority, under sec-
tion 501 of the act, to transfer as much
as 10 percent for any purpose he may
desire. Since $3,742 million has not
actually been obligated, the President
would have authority under section 501,
to transfer $374 million.
Applying the 10 percent transfer au-
thority to the amount authorized in'the
present bill, less the development loan
fund authority, less the special fund and
contingency fund-both of which are
100 percent transferable-the total
amount which could be transferred to-
tals $262 million.
Also, under section 13, there is author-
ity to transfer from military aid to de-
fense support, or vice versa, $235 million.
There is also the contingency fund,
which I am seeking to strike out, of $200
million, which the President can spend
100 percent as he sees fit.
Of course, the special assistance fund
of $212 million falls in the same category.
If we add these figures together, it is
obvious that the President has authority
to transfer as much as $1,283 million
from one item to another-the only limi-
tation is that the amount transferred
must not exceed 20 percent of the item to
which it is transferred.
I believe the contingency fund should
be stricken out, because the President
already has ample authority to transfer
funds from one category to another.
So I hope the Senate will agree to the
amendment.
The - PRESIDING OFFICER (Mr.
CHURCH in the chair). The question is
on agreeing to the amendment of the
Senator from Louisiana.
Mr. DIRKSEN. Mr. President, I
thought perhaps a member of the For-
eign Relations Committee would oppose
the amendment. But certainly I wish
to oppose it.
Mr. FULBRIGHT. Mr. President, if
the Senator from Illinois will yield, let
me say that I, too, shall oppose the
amendment.
9369
Mr. DIRKSEN. I am glad to hear
the Senator say so.
Mr. FULBRIGHT. So I do not think
the Senator from Illinois should jump
to the conclusion that no member of the
committee will oppose the amendment.
Mr. DIRKSEN. I am sorry I was in
error. But the Chair had put the ques-
tion, and I did not see any member of
-the committee on his feet.
Mr. FULBRIGHT. If the Senator
from Illinois wishes me to do so now, I
shall be glad to state that I opposed the
amendment in the committee, and I
shall oppose it here. I voted for the cut
in military aid that I have voted for
heretofore.
Mr. DIRKSEN. Mr. President. I shall
most willingly defer in favor of the Sen-
ator from Arkansas.
Mr. FULBRIGHT. Mr. President,, I
think other members of the committee
will take the same position that I do in
regard to the amendment.
I did not mean to take the Senator
from Illinois off his feet; I merely
wished to point out that he was jump-
ing to an erroneous conclusion.
Mr. DIRKSEN. I realize that that is
so, Mr. President.
Let me say that in view of the situa-
tion existing today in Lebanon, in Africa,
and elsewhere, I believe it would be folly
to tie the hands of the President, who
is the Commander in Chief of our
Armed Forces, in such a way as to pre-
vent him from taking action in situations
which relate to or involve or affect our
national security.
So I earnestly hope the amendment
will be overwhelmingly defeated.
Mr. CAPEHART. Mr. President, let
me call attention to the fact that, as a
result of the vote on the last amend-
ment, whereby a reduction was made,
supposedly, in the amount of $200 mil-
lion, the Senate actually did no such
thing, insofar as the overall authori-
zations provided by the bill are con-
cerned, for the ceiling remains at $2,400
million. What the Senate did, by means
of the vote taken a moment ago, was to
delete the $200 million from the $1,600
million. But the committee deleted
$235 million from the total of $2,635
million, and thus set the ceiling at $2,400
million. And even after the last vote,
the ceiling is still $2,400 million. .
Mr. ELLENDER. The maximum mili-
tary assistance ceiling has been cut by
$200 million. That is what I was trying
to achieve.
Mr. CAPEHART. But my point is
that the sum total is exactly what it was
before. So let us not fool anyone into
believing that, by means of the last vote,
the overall amount has been reduced, be-
cause it has not been reduced.
Mr. AIKEN. Would not this amend-
ment, if agreed to, strike out the $200
million of so-called emergency funds
the President has?
Mr. CAPEHART. I was speaking of
the previous amendment.
In the case of the pending amend-
ment, if the amendment is agreed to it
will eliminate the $200 million in the
so-called emergency fund we have pro-
vided for the President. But if there is
anything that is worth while, in view of
the present world conditions, it is the
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9370 CONGRESSIONAL RECORD -SENATE ' June 6
$200 million emergency fund we have
provided for the President. If cuts are
to be made, let them be made elsewhere.
I believe we have seen enough during the
last few years to know that this fund
'is not a proper place in which to make
a reduction.
Furthermore, as I have stated, follow-
ing the last vote, we still have .exactly
the same total amount as we had before.
We have made a shift from the mili-
tary, rather than to make a change in
the total amount, whereas the commit-
tee took the $235 million from the total.
So, Mr. President, in view of present
world conditions, if we really wish to
fight communism and fight Russia, we
should retain the 200 million. If cuts
are to be made, let them bemade in the
amounts for miltary aid or economic aid,
but not in the President's emergency
fund because the money in that fund is
deeded.
Mr. AIKEN. Mr. President, I deplore
as much as does anyone else the sudden
shift in the position of the administra-
tion in regard' to the Kennedy amend-
ment; and I realize the great tempta-
tion-which has affected me somewhat
today-to vote to make 'a reduction in,
`or eliminate entirely, the President's $200
million emergency fund.
It, is true that if the President does
not have an opportunity to spend any
of the money in the satellite countries,
he possibly may not need as much of
the money as he otherwise would. Nev-
ertheless, we cannot know when or where
It may be necessary for him to spend
some of this money very quickly.
Inasmuch as the security of the coun-
try is involved it is possible that we would
regret any hasty action in this connec-
tion.
Therefore, despite my regret-as stated
yesterday-about the reported change of
position by the administration, I shall
vote to give the President the emergency
money which I think he ought to have
4n the interest of the country.
Therefore, I shall vote against the
pending amendment.
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Louisiana [Mr.
ELLENDERI.
Mr. FULBRIGHT. Mr. President, as
I said a moment ago, I believe this par-
ticular item is one of the most important
in`the bill, and I believe that certainly
the President should be allowed flexi-
bility in the use of these funds.
I believe that other items, such as the
one for military aid, could stand a cut;
and I voted to make such a cut. But I
do not think this item can stand a cut.
Therefore, I hope the amendment will
be rejected by the Senate.
Mr. SMITH of New Jersey. Mr. Presi-
dent, I agree 100 percent with what the
Senator from Arkansas has stated.
In the committee we have studied this
matter very fully.
Last year, when the Congress sub-
stantially cut special assistance, part of
which was to be for contingencies, the
President found himself, In March, with
only $5 million left, in special assistance
funds, before some of the crises In the
Middle East occurred.
So It would be foolish for us to make a
cut in this $200 million fund. If I were
to take the time, I could relate many de-
tails in this connection. However, I
shall not take time to do so.
Certainly, - the President must have
this fund, in order to take care of emer-
gency situations as they arise; and the
$200 million is the minimum amount
needed for this purpose.
Mr. ELLENDER. Mr. President, let
me point out that I am not referring to
the amount which was provided last year.
Instead, my amendment relates only to
the additional amount proposed this
year.
Mr. SMITH of New Jersey. But the
amount last year was insufficient and
has been used before the end of this fis-
cal year; thus, the additional amount
now proposed for the coming fiscal year
is required.
Mr. ELLENDER. Last year it was
called a special assistance fund, and
$225 million was provided for the same
purposes for which this year it is pro-
posed that we create two funds, with a
total authority of $412 million.
As I pointed out, in addition to the
provision for $212 million of special as-
sistance funds which would still remain
in the bill even if my amendment should
be adopted, the President has the right
of transferability over $374 million of
unobligated balances which are in the
pipeline. He can do what he wants to
with that amount. Under section 501
of the Mutual Security Act of 1954, as
amended, he would have transferability
over $235 million, based on the amount
to which that section is applicable in
this bill. He can transfer those funds
from one category to another, as he may
see fit. He can do as he wishes with
those funds.
Mr. SMITH of New Jersey. I regret
very much that the distinguished Sena-
tor was not with us at the hearing when
it was demonstrated that is not the fact.
The President does not have that leeway.
Mr. ELLENDER. Does the Senator
mean to say the President does not have
the 10-percent transferability over this
bill?
Mr. SMITH of New Jersey. Certainly
he has, but there are situations existing
all over the world today, and which ex-
perience tells us will exist, which will re-
quire more than can be transferred by
law from other%programs without harm-
ing those programs.
Mr. ELLENDER. Hostilities could
break out again. I would not be sur-
prised if they should, the way things are
going in north Africa, Lebanon, and other
areas. I presume that is the reason why
the provision was put in the bill. But I
point out to the Senator we are retain-
ing in the bill the same special assist-
ance fund with about the same amount
as provided last year, a fund that can be
used by the President as he desires.
That provision would stay in the bill
even if my amendment were adopted.
In addition, the President has trans-'
ferability in excess of $1 billion, as I
pointed out earlier.
Mr. GREEN. Mr. President, I think
all the differences of opinion which have
been expressed about the proposed
change show how dangerous it is to
try to legislate on matters of this kind
on the floor of the Senate. The Foreign
Relations committee is one of the best
committees of the Senate. It has spent
a great deal of time in-adjusting these
figures in committee. A great many pro-
posals back and forth were made. The
effect of all the different phraseology was
discussed. The conclusions arrived at by
the committee are now before the Sen-
ate. To begin now to "monkey" with the
figures and transfer money from one fund
to another would be unwise.
There are differences of opinion as to
what the proposal does. Some Senators
say it would take $200 million from one
place and put it in another place. Some
Senators say we have made a great
change. Others say no change at all
has been made. . Others say we have
changed it in some other place. No one
knows what the,amendment does. Each
one thinks he knows, but there is no
agreement. I think the safest thing to
do Is for the Senate to adopt the results
of the careful consideration of the com-
mittee whose duty it was to make these
recommendations.
The PRESIDING OFFICER. The
question is on agreeing to the amendment
of the Senator from Louisiana [Mr.
ELLENDERI.
The amendment was rejected.
Mr..ELLENDER. Mr. President, I call
up my amendment identified as 6-4-58-F.
The PRESIDING OFFICER. The
amendment of the Senator from Louisi-
ana will be stated.
The CHIEF CLERK. It is proposed, on
page 35, beginning with line 3, to strike
out all of section 5, down through line 12.
It is proposed to renumber the succeed-
ing sections accordingly.
Mr. ELLENDER. Mr. President, over
the years there have been accumulating
in many countries huge sums in so-called
special counterpart fund accounts.; In
that category there is a total of $710,-
956,774 in such countries as Bolivia,
Burma, Cambodia, China, Germany,
Greece, Haiti, and so forth.
These counterpart funds have been ac-
cumulating over the years, and can be
spent only by agreement between the
country in which such funds are located,
and our country.
The Foreign Relations Committee,
which studies matters so carefully, as
my good friend the Senator from Rhode
Island [Mr. GREEN] has just stated, has
put a provision in this bill that would
permit the Austrian Government to use
part of the funds in the counterpart ac-
count then vest them in an institution
in Austria to pay damages sustained by
certain Austrians at the hands of the
Nazis during World War II.
. The provision in this bill is the foot in
the door, so to speak. There will no
doubt soon be a cry to permit other coun-
tries in which counterpart funds are lo-
cated to utilize such funds for purposes
other than those now authorized by law.
I have gone to Austria. in3 of the past
5 years.
The first year I went there-it was
1953 as I recall-the counterpart account
had some 5 billion schillings in it, about
$200? million in terms of our money to
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 - -------------- ----- -
1958 . CONGRESSIONAL RECORD -SENATE
spend. Our planners were having a hard Second, the counterpart funds will be
time trying to spend that money, loaned to the Austrian Government to
Today there is a balance of $42
sati
f
th
l
.
s
y
e c
aims, and will be repaid into
lion in counterpart in the fund and ways the counterpart account. Thus, there
and means are being sought to spend would be no net loss of counterpart
that money. The latest seems to be a funds.
scheme to pay reparations, or damages, That is a summary of what the pro-
to Austrians who do not live there now vision in the bill, as recommended by the
but who were in some way injured or committee, would do.
oppressed during World War II. - Mr. ELLENDER. Mr. President, will
This is a purpose for which counter- the Senator yield?
.part has never before been used. It is, Mr. GREEN. I yield.
as I said, the foot in the door. If we Mr. ELLENDER. Is this language not
authorize this for Austria, Mr. President, broad enough to permit any other coun-
other countries will ask for similar treat- try to use counterpart funds for new
merit. purposes, the same as is sought to be-
France today has a balance of $402 done for Austria?
million in such funds. - Mr. GREEN. Similarly.
Korea has $188 million worth of coun- Mr. ELLENDER. Exactly. In other
terpart funds. words, the language in the bill is not
All over the world, we have a total of limited to Austria. The bill would make
over $700 million in special counterpart it possible for any country which has
it
ed
o
t
d
t
?-.
t
s
an
, we tnan, in effect,
be turning over to a. band of bureaucrats
in the State Department, absolute au-
thority to use that $700 million as they
may decide, subject to no congressional
control, to be used for unknown and
unspecified purposes.
Mr. President, ' because of the secrecy
surroundipg the military assistance we
are giving to Austria I am not able to go
into detail, but in the bill there Is a huge
sum for military assistance to Austria.
Instead of permitting Austria to use this
money to pay for damages done to some
of her people during" World War II we Mr. GREEN. l wh there is anover-
should, I believe, insist that the money provi in the bill whi ch has been or
be used to help in the military estab- looked by my distinguished friend, the
e
lishment, thus reducing the burden on Senator from Louisiana, which reads as
our own taxpayers. follows:
Mr. President, I hope this amendment provided, That if amounts in such re-
pr
will be adopted. Let us not set a prece- igs r exceed the requirements of such
dent whereby counterpart funds in. all programs, the recipient nation may utilize
such excess amounts for 'other urose
countries where special counterpart ac- a
greed to by the United States which arecons
counts are found can be used for pur- sistent with the foreign policy of the United
poses other than those originally in- States.
tended. Mr. ELLENDER. That is the lan-
Mr. GREEN. Mr. President, I am very guage which was added by the commit-
sorry to have to differ again with tee-the language which would make it
my good friend, the Senator from Loui- possible for the money to be spent for
sialla, but I think the criticism of the purposes other than those the law now
provision in the bill is unfounded. The provides.
amendment would strike from the bill a
section which is designed to make it Mr. JAVITS and Mr. CASE of South
possible to use 100 million counterpart Dakota addressed the Chair.
Austrian schillings, which is about $4 guage Mr. is to be GREEN. n It is obvious the connection
million, to compensate. certain former considered in connection
Zh nationals who have legally Mr. other language. ELLENDER.
verified claims against the Austrian Gov- Mr. modifies the Of course. The lan-
ernment for persecutions under the last Mr. G guage GREEN. present another low.
regime, which was the Nazi regime. an N. This the . mceee of
regime, provision of the bill was presented port attempt G and REc to rewrite recommendation.
-the committee by the distinguished Mr. ELLENDER. Mr. junior Senator from New York ^Vir. the e Senator r. President, will
Md?
JAVITSI, and was agreed to by the com- Mr. GREEN. yield?
nk pro ov answer ol-
mittee, It is fully explained on page 11 been n quite suuflI3cient t think
of the committee report. ve to my col-
leagues on the floor that there is no harm
I shall emphasize two points now, to in the provision as recommended by the
make my statement brief. committee, and I trust that the recom-
. First, the counterpart funds involved mendation of the committee will be
are not owned by the United States, adopted by our colleagues on the Senate
The use of the funds, therefore, does not floor.
cost the United States anything. Legis- Mr. ELLENDER. Am I to under-
lative authority to use the funds in the stand the Sefiator to say that the Com-
manner proposed is necessary because mittee on Foreign Relations is in such a
the United States, though it does not own position that the Senate cannot amend
the funds, does have a veto with respect anything it does? Is that the position
to their use. taken by the Senator?
in the law.
The report states:
Section 142 (b) of the act, which deals
with the . generation of' foreign currency
counterpart funds, provides that a portion
of these funds, generally up to 10 percent,
shall be made available to the United States
for its uses and that the remainder will be
used for programs agreed on by the United
States and the country concerned to carry
out the purposes for which new funds au-
thorized by the act would themselves be
9371
Mr. GREEN. Not at all. It should be
perfectly clear that, when.there is some
mistake made by the committee it can
be corrected. No mistake has been
shown to have been made by the com-
mittee. The conclusion must logically
follow, unless some mistake is shown.
Mr. ELLENDER. Mr. President, the
mistake I have tried to show here is that
the committee is attempting to amend
the present law so that counterpart
funds In the special accounts can be used
for purposes other than those now pro-
vided by law. Austria is going to be in
need of economic aid, probably, in the
next 2 years. What is going to happen?
The Austrians may come to us, and the
Committee on Foreign Relations may
find it necessary to recommend the ap-
propriation of more dollars so as to gen-
erate counterpart funds. Why not,
then, let these funds remain available for
such purposes instead of whittling away
at them?
Mr. President, as.I pointed out a while
ago, I have visited Austria on 3 or 4
occasions. I commented to the Appro-
priations Committee in a report I filed
several years ago that I thought it was
shameful for the administration to per-
mit the accumulation of so many
schillings from counterpart funds. Aus-
tria could not spend them. It took 4 or 5
years to dispose of some of that surplus,
and there are still $42 million in counter-
part funds which could be used, if de-
sired, to help on military plans.
I repeat that the bill authorizes for
Austria a huge sum-I am not permitted,
because of secrecy, to tell the amount
-
for military aid, to assist Austria in its
military effort. I say that some of these
counterpart funds could be used for that
purpose.
Mr. JAVITS. Mr. President-
The PRESIDING OFFICER. The
Senator from New York.
Mr. JAVITS. Mr. President, I have
been referred to as the Member who
testified on this item before the Com-
mittee on Foreign Relations; so, if I may,
I should like to give the Senate the basic
facts which are Involved, to show how
this matter came to my attention and
what it means. I shall try to do so very
briefly.
In Austria a law was passed a few
years ago-
Mr. BUSH. Mr. President, will the
Senator speak a little louder, please?
The PRESIDING OFFICER. The
Senate will be in order so that the Sen-
ator from New York may be plainly
heard.
Mr. JAVITS. Mr. President, a few
years ago in Austria there was passed
a law to establish a fund called the
Hilsfand, for the purpose of looking after
the Interests of superannuated people,
those over 60 years of age, who had suf-
fered at the hands of the Nazis in
Austria.
These are people who have since left
the country and have not returned. I
do not believe that any Senator would
need to look into his own mind too deeply
to determine why they have not returned.
Their claims are somewhere between
$1,000 and $2,000 each. There are 30,000
of them. The right to receive any com-
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 9372 CONGRESSIONAL RECORD -SENATE , June 6
pensation is based' upon need. 'Every I emphasize that-and only out of what expenditure for some purpose which
in the
clerk
counte
on iste t
State met. in that respect has been fully are othreal er, words, after her funds.unterpart determine to be desi able orartment
standard
met.
The Austrian Government allocated funds have been utilized and appor- with the foreign policy of the United
555 million Austrian schillings, roughly, tioned for every other purpose, includ- States.
the equivalent of about $20 million, for ing the military purposes, if any there This provision will not be permitted to
the purpose of making these payments, be, for which counterpart funds are remain in the bill even if I am required
and it provided that the payments should needed, they may be devoted to the pur= to expend some time to advise the Sen-
be made over a period of 10 years, pose to which my friend and colleague ate what it is all about. ed.
from South
Senator
Dakota roughly, the rate of 55 million schil- thfrom Louisiana is is strictly a transact on i volving washe ajunior
member of the Approp i t ons
,legs a year.
It appeared that those in the most surplus Austrian schillings piled up and Committee of the House of Representa-
urgent need and facing a really dire doing nothing-funds which could be tives at the time the first appropriation
situation represented a required ex- made available to the Austrian Govern- wastmade
deforrthe foreign othaid defi.c racy
penditure at this time, if they are to be ment itself by a loan transaction. This
proposed that which
rendered any assistance-because they is not money which the United States handled itte subject, in the
are very old-of 200 million schillings. could use. It is not money for which should require that a portion that the
The Austrian Government provided for the United States bargains, or which it should require
funds should be made of the
payment of 10 percent every year. It could use for any beneficial interest for for expenditure by the United
would borrow from the counterpart funds its own purposes. These are funds over able
another 100 million schillings in order and above everything which I have men- States, on the theory programs, when we hhad ad
to meet the urgent need of the old peo- tioned. domestic
the red aid the PWA, we when we always had
ple, which amount, to be borrowed from This is a case in which, by a loan thered that the recipient community-
the re -
the counterpart funds, it would subse- transaction
wn, or public agency put up a sponsor's
I have described, some peop eawho toqui,
quently repay. contribution.
First, this is strictly a loan transac- ware hoamong finthe d most deserving on
other help, will be So I suggested at that time that we
tion. that 10 percent of the counter-
Second, it is for a highly humanitarian helped now, when the help will them funds be made available for ex-
purpose. some good, instead of later, when they part d
Third, no commitment of any kind or are dead. penditure ed. for There the was some purposes objection of f the the United
character is involved. The State De- Mr. CASE of South Dakota. Mr. he time. I think I bill suggested to it
20
partment suggested this language. I President, will the senator yield? at percent.
t t e. In nk fir wad reported
originally went before the committee Mr. JAVITS. I yield.
result of Hothe use, figure was 10 percent.figu
with a request for a special provision for Mr. CASE of South Dakota. If I may tThe othe
this s specific purpose. The State De- have the attention of the Senator from e ult o. I recall in those days
partment suggested this general lan- Louisiana, I should like to ask a few of 5 r were jealous c ll that
purposes for
guage for one purpose, in order to give questions about the table which he as to the
were to be used.
itself the authority to negotiate the handed me a few minutes ago. It is which were jealous
regarded u s them funds w e asset of the
transaction the or' not, as it ncesthought wise labeled ministration Balance aof Special Counter- United States, purchased by tax dollars
Mr. under all I BRIDDGErS. . . Mr. President, President, will part Accounts as of December 31, 1957." spent for assistance given to other coun-
table
epared he Senator from New York yield for a the Office oft the Comptr llerrGene alby tries.
we become so callous and so in-
t
Mr. question? Mr. ELLENDER. That is correct. different to the use of assets of the
M BRIDG . I yield.
Mr. BRIDGES. Who determines the Mr. CASE of South Dakota. Is this United States that we are now going to
counter-
basis for the payment? Is it our State list of funds the total amount. of funds say part that funds $710 maybe million used worth the of recipient
Department? which' which' have not been utilized for auth-
Mr. JAVITS. The individual claims orized purposes? nations for other purposes, agreed to by are are determined under Austrian law by Mr. ELLENDER. That is my infor- thehUnited foreign States, policywhich of thonsis end the a board designated under the law. But mation.
if our State Department has the neces- Mr. CASE of South Dakota. This list States, without spelling out the stand-
sary authority, before it permits any_ shows that there is involved not $4 mil- iards or ndicate pee id ng some guide lines
those
counterpart funds to be applied it will lion, but $710 million. afu are to purpose be ueedo I wonder if
pass upon the fairness of the procedures Mr. ELLENDER. That is what I funds nds as of the Senate really onde f j
by which the claims are adjudicated. though I stated to the Senator. The Mem e s of hed. what is
There are some 30,000 claims. Consid- figure in the last column- In Aus-
ering the number of claims and the Mr. CASE of South Dakota. This is It eerealy yi$40 $400 0 million. of Ishn shillings,
involved, a ceiling is placed on a proposal to give to some clerks in the trig is they not t merely
will leave off ff the
the entire operation of between $1,000 State Department the authority to ap- worth dollars. I million. I will and L the
and $2,000 per person. propriate money and to determine the odd dol$41 lays. $405,000 worth of francs u In
Mr. BRIDGES. Do these claims in- purposes for which $710 million worth of oddrg Bourg, , ,0000 worth of francs. In
voive property damages, or personal in- counterpart funds shall be used. There France, $402,000 worth of pounds. In
Juries? ought not to be any mistake about the Ireland, $10,2,0 worth of lira. the
Mr. JAVITS. The claims involve per- broad scope of this language. The re- Netherlands, al, 5wort worth a guilders.
sonal injuries. The requirement of the port of the committee itself says: er$2350 worth. In Portugal,
Austrian law is that the money shall go Although of general application, this In6Nor ay, $97,000 the United Kingdom,
only to people over 60, who have suffered amendment is designed in particular to
as a result of permanent injuries re- make it possible for the Austrian Govern- $552,000 worth. Those are countries not
ceived in concentration camps. ment to lend 100 million counterpart Aus- currently receiving economic assistance.
` I do not think there is much question trian schillings (approximately $4 million) The portal is $138 mh ion worth
the o languagef
the humanitarian aspect involved. to the Austrian Hilsfand for use in compen-funds, under
The 100 million schillings coming out of sating former Austrian nationals who were in the bill would be available for pur-
counterpart funds is a loan, which will persecuted under the Nazi regime and are poses other than those spelled out in
now residing outside Austria. mutual-aid legislation to this date. The
be made on account of a commitment.
to repay by the Austrian Government. It is intended to take care of a $4 money will be available for other pur-
As the provision is drafted, it con- million situation, but according to the poses-agreed to by the United States, to
tains one further safeguard. It per- committee report, the provision is of gen- be sure-consistent with the foreign pol-
mits this transaction to take place only eral application. "General application" icy of the United States.
after agreement between the United means that some $710 million worth of If Members of the Senate have any
States and the Austrian Government- counterpart funds will be available for imagination at all, they will realize that
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CONGRESSIONAL RECORD - SENATE
the other purposes agreed to by the
United States will be some purposes that
some clerk in the State Department or
in the mutual-security office suggests or
finds are consistent with the general for-
eign policy of the United States.
The $138 million is not the total story.-
There is $572 worth of counterpart funds
in other countries. Let me review that
list.
Mr. President, may we have order?
The PRESIDING OFFICER. The
Senate will be in order.
Mr. CASE of South Dakota. Here are
some of the other countries in which
the idea of someone ill the State Depart-
ment or someone in the MSA will deter-
mine the-expenditure of funds created by
taxpayer dollars. In Greece-
Mr. ERVIN. Mr. Presidents will the
Senator yield?
Mr. CASE of South Dakota. I yield.
Mr. ERVIN. I should like to ask the
Senator if I am correct, in my under-
standing that these counterpart funds
originate from shipments of surplus farm
crops which the Government of the
United States originally purchased.
Mr. CASE of South Dakota. In some
instances, but not wholly. These coun-
terpart funds would not be limited to
funds obtained by the sale of surplus
agricultural commodities. These coun-
terpart funds would be funds obtained
by giving economic assistance or military
assistance to some country which put up
counterpart funds in its own currency.
Mr. ERVIN. In other'words, they are,
in effect, a gift obtained from the
American people, from the United States,
'given, to those nations, primarily for the
purpose of enabling them to develop eco-
nomic improvements. Is that correct?
Mr. CASE of South Dakota. This
would be the second gift. In the first
place, we made available assistance in
terms of dollars or' materials. Then
again, under?this language, we would be
able to give them back to the countries
for whatever purpose might be agreed
upon by the representative of the United
States if found consistent with our gen-
eral foreign policy.
Mr. ERVIN. Am I to understand that
the excuse which was made for the in-
clusion of the language in the bill, which
would permit what is really a diversion
of counterpart funds from the original
purposes, is that it would be desirable
to authorize the State Department to
enter into agreements with Austria
whereby the present Austrian Govern-
ment would pay claims against the de-
funct Nazi Austrian government filed
by persons who had been placed in con-
centration camps in Austria while it was
under Nazi rule?
Mr. CASE of South,Dakota. A,ppar-
eztly that would be possible.
Mr. ERVIN. In other words, in the
long run it would mean that we would
ask to release these counterpart funds
from their original purpose upon the
pretext that the money would be used to
pay claims, aggregating $4 million, to
victims of the previous Nazi Government
of Austria; in other words, that the sins
of the Nazis would now be saddled upon
the American taxpayers indirectly?
Mr. CASE of South Dakota. Yes. The
case for that is made upon the $4 million
item. However, I ask Senators to listen
to some of the other places where this
money might be used. Through the
years we have developed specific uses for
counterpart funds. They have been used
for building and the maintenance of em-
bassies, the purchase of strategic ma-
terials, and so forth; but if the funds
have not been spent for that purpose,
under the language of the bill they could
be used for other purposes. Let me read
the proviso in the bill:
Provided, That if amounts in such re-
mainder exceed the requirements of such
programs-
That is, if the amount exceeds the
requirements of authorized programs
such as the use of the, counterpart funds
for the payment of State Department ex-
penses, in connection with embassies, for
example, or for the procurement of raw
materials-
the recipient nation may utilize such excess
amounts for other purposes agreed to by
the .United State?; which are consistent with
the foreign policy of the United States.
What purposes? Purposes agreed to
by the United States. Which means
that some representative or clerk could
make the determination. Purposes
which are "consistent with the foreign
policy of the United States."
Let me read some of these figures.
Yugoslavia, $13,680,000 worth of dinars,
to be used for such purposes as some
clerk in MSA or the State Department
might determine was consistent with the
foreign policy of the United States. In
Vietnam, $38 million worth. In Tur-
key, $21 million worth. In Thailand,
$19 million worth. In Spain, $25 million
worth.
Mr. JAVITS. Mr. President, will the
Senator yield?
Mr. CASE of South Dakota. In the
Philippines, $4 million worth. In Pakis-
tan, $64 million worth. In Laos, $611,-
000 worth. In Korea, $108,770,000
worth. In Jordan, $1,849 worth. In
Iran, $5,200,000 worth. In Indonesia,
$13,341,000 worth. In Iceland, $11,811,-
000 worth. In Haiti, $250,000 worth.
Ill Greece, $122,678,000 worth.
What reason is there for giving some
employee of the MSA or the State De-
partment the right to determine the
purposes for which $122 million worth
of Greek money shall be spent if it is
found to be consistent with the foreign
policy of the United States, and taking
the determination away from Congress
and its Appropriations Committees?
? Mr. ANDERSON. Mr. President, will
the Senator yield? Mr. CASE of South Dakota. I yield.
Mr. ANDERSON. Does the Senator
know of any similar situation where the
employees of this agency have the right
to spend $100 million without reference
to Congress?
Mr. CASE of South Dakota. No.
Mr. ANDERSON. Does the Senator
know of any other group that can spend
over $100 million under such general
language as is contained in the bill,
without reference to Congress?
Mr. CASE of South Dakota. No.
`When we have had emergency funds to
9373
expend, we have at least put them in the
hands of the President, and we have
asked that the President make the de-
termination or finding.
Mr. ANDERSON. This money is not
being placed in the hands of the Presi-
dent?
Mr. CASE of South Dakota. No. It
Is to be spent for purposes agreed to by
the United States, consistent with the
foreign policy of the United States.
Mr. ANDERSON. Would it have to
be referred to Congress?
Mr. CASE of South Dakota. Nothing
in the provision says that.
Mr. JAVITS. Mr. President, will the
Senator yield?
Mr. CASE of South Dakota. I shall
yield as soon as I have read the remain-
ing figures.
Mr. JAVITS. ' Will the Senator yield
to me, inasmuch as the whole picture has
been distorted? Why does not the Sen-
ator yield to me?
Mr. CASE of South Dakota. I shall
be glad to yield after I have read four
more lines.
In Germany, $18 million worth. In
China, $21 million worth. In Cambodia,
$2,488,000 worth.
Now I yield to the Senator from New
Mr. JAVITS. Mr. President will the
Senator please tell us-I know he it
astute in international matters-what
difference he believes exactly and pre-
cisely will be created by the amendment
over the existing situation in the law to-
day as to the counterpart funds, as he
understands it?
Mr. CASE of South Dakota. My un-
derstanding is that today the purposes
for which counterpart funds may be used
in some instances are spelled out. They
are for authorized purposes. In this in-
stance it would be for other purposes.
They could be used with the sky as the
limit, provided the use was consistent
with the foreign policy of the United
States.
Mr. JAVITS. May Igo over that point
with the Senator? First, I believe we
agree that counterpart funds are not our
money; such funds are money which can
be spent for certain purposes only with
the consent of the benefited country. Is
that not correct? '
Mr. CASE of South Dakota. Not
wholly. The 5 percent of the counter-
part funds which were made available
for expenditures by the United States
can be expended by us without consulta-
tion.
I think there has been some amend-
ment to the law since the original pro-
vision was enacted. I have not served
on the Committee on Foreign Relations
or on the Committee on Appropriations
for some time. I have not tried to keep
informed about all the amendments
throughout the years with respect to
this matter.
Mr. JAVITS. The amendment does
not affect the 5 percent or the 10 per-
cent, does it? It very clearly says after
all other purposes for which counterpart
funds can be used have been served. So
it dqe~~s not affect the 5 percent or the
10 percent.
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9.374 CONGRESSIONAL RECORD -SENATE
'> Sr. CASE-of South Dakota. That is
correct.
Mr. JAVITS. Moreover, the amend-
,ment does not affect the use of counter-
-part funds for any other purposes for
Which- the funds can be used under the
'bill, whether for technical assistance,
economic aid, or military assistance: It
says so in express terms. So it does not
affect whatever, may be required or
agreed upon to deal with other provi-
sions of the bill. Are we agreed upon
that?
Mr. CASE' of South Dakota., We are
agreed on that.
Mr. JAVITS. So the only thing the
amendment affects is some indetermi-
nate sum over and above all other re-
quirements which do not belong to us
anyway.
Mr. CASE of South Dakota. I do not
agree to that.
Mr. JAVITS. Will the Senator say
why?
Mr. CASE of South Dakota. Because
in the basic provision with respect to
the counterpart funds there was a clause,
if -my memory is correct, to the effect
that Congress _vas to agree upon the
purposes for which the funds might be
spent. Here, in one blank check, we
are turning over to an employee some-
where in the Government the determi-
+nation of what those other purposes may
be. There is no definition or delinea-
tion.
If there Is $710 million worth of
counterpart funds which cannot be ex-
pended for the purposes which have been
agreed upon, then I say that Congress
should take those funds into considera-
tion, and have hearings held, and de-
termine appropriate purposes for the
expenditure of those funds. The de-
termination of the purposes should not
be left to some employee in the execu-
tive branch of the Government, about
whom we do not know anything or at
what level the determination may be
made.
Mr.JAVITS. The,Senator from South
Dakota has been referring to a figure of
$700 million. The $710 million is the
whole counterpart package, and it is
necessary to deduct from that at 10 per-
cent, plus the funds for counterpart use
and other purposes under the act. So
the amount is not $710 million, is it? It
must be some very much smaller sum.
Mr. CASE of South Dakota. I sought
to identify the sheet and the character of
it by the Senator from Louisiana when
he handed it to me. This is the balance
as of December 31, 1957. At least, that
Is what it says. It says how much of the
$710 million may be in the 10-percent
fund or how much may be expended for
some purposes within the authorized pur-
poses. In any event, it was the balance
as of December 31, 1957, in the special
counterpart account.
Mr. JAVITS. Will the Senator then
say that we have $8 billion, as I under-
stand it, in the pipeline for mutual secu-
rity, and we are appropriating another
$3, billion now, or we will under this par-
ticular authorization? That Is around
$11 billion. That is not counterpart
money; that is hard American money.
Does the Senator from South Dakota
say that when we used the words "the
United States" in this particular revision,
the expenditures will be made irrespon-
sibly by, some eighth-grade clerk; but
that the $11 billion can be safely en-
trusted to the President himself, or to
some very high official of the Govern-
ment with the President's approval? Is
that the Senator's argument?
Mr. CASE of South Dakota. No. My
argument is that the Senator has made
the ease a little worse. The Senator has
pointed out that there will be $11 billion
more to generate counterpart funds. If
there is already this much of a balance
left, and we are going to generate addi-
tional counterpart funds, then I say that
if tl1ere is already a surplus of counter-
part funds, there will be a greater surplus
when the new authorization has been
expended. That is all the more reason
why Congress should address itself to this
balance and determine the purposes for
which it shall be used.
Mr. JAVITS. The Senator made a
statement about the sum of $11 billion.
It is a fact that military aid money does
not generate any counterpart funds, and
that today very little of what is expended
under the whole foreign aid program
generates counterpart funds. This is all
a heritage of other days, when counter-
part was generated in very large part.
Mr. CASE of South Dakota. If the
Senator from New York wants to break
down the $11 billion, to determine how
much it will generate in counterpart
funds, let us take that figure. But the
Senator from New York pointed out that
there is $11 billion more in the pipeline
or about to be authorized, and out of
that grant there will be $11 billion of
counterpart funds generated. Out of
that, there will be some surplus.
Mr. YOUNG. Mr. President{ Will the
Senator yield?
Mr. CASE of South Dakota. I yield.
Mr. YOUNG. Under the average ar-
rangement made with foreign countries
with respect to Public Law 480, the
United States reserves from 20 to'30 per-
cent for United States use. We are au-
thorizing more and more Public Law 480
funds, so more and more counterpart
funds will be generated.
I think it is absurd to leave to some
Government official the discretion of
spending hundreds of millions of dol-
lars. We are continuing to build up these
funds more and more.
Mr. CASE of South Dakota. I think
that Is a good point. We are getting
more counterpart funds all the time. We
ought to look upon them as an asset.
When we had under consideration an
extension of Public Law 480, I proposed
an amendment to create a special trust
fund in the Treasury into which the
counterpart funds would be placed, to
make them subject to direct appropria-
tion, so that Congress could review the
purposes. But here it is proposed that
Congress will not review them, but will
let some clerks review them and de-
termine.the purposes for which they shall
be spent.
Mr. YOUNG. We are finding more
and more uses for counterpart funds in
lieu,of United. States dollars in almost
every country. 4ire we going to use them
or spend them willy nilly in the future
June 6
or are we going to try and find more
uses in lieu of United States dollars in
the future? This open-door provision is
one of the reasons why I stopped voting
for the foreign-aid program. It is get-
ting wilder and crazier every day.
Mr. CAPEHART. Mr. President, will
the Senator yield?
Mr.. CASE.of South Dakota. I yield.
Mr. CAPEHART. I think that what
the able Senators are objecting to is a
matter which has already been settled
and handled by Congress by virtue-of ex-
isting laws. Of the counterpart funds,
the United States reserves 10 percent.
The balance of such funds belongs to
the countries in which they are gener-
ated. Those countries have the right
to spend the funds in any way they see
fit. But the United States Government
reserves the right to veto the way in
which the foreign countries spendthose
funds.
If we are to do what the able Sen-
ators are talking about, we should have
made such a provision in the act many
years,ago. This particular amendment
does not change anything at all, except
that this is a case In which Congress is
asked to pass, upon a specific expendi-
ture which is not an expenditure. It is`
a loan. We will loan the money to the
Austrian Government. The Austrian
Government will pay it back.
In this case, what is objected to Is
something which the committee covered
by writing it into the law.
At this time, of all the funds the Sen-
ator named in the respective countries,
the United States owns 10 percent of the
total amount. Nevertheless, under the
existing law the unseen clerks whom the
Senator is talking about have the right
to say for what purpose the money shall
be spent. If the Senator wants to change
that provision, he will have to change
the existing law.
In, this case the committee specifically
said that there is X amount of coun-
terpart funds in Austria which is not
needed by the Austrian Government.
They have no heed for it; they have no
way to spend it. They have asked that
it be spent for a specific purpose at the
present time, and they will repay the
fund at a later specified date.
So what the Senator is complaining
about is covered in the law.
Mr. CASE of South Dakota. Perhaps
the Senator from Indiana can point out
to me where that has been limited in
the report. Can the Senator point out
where the $400 ;pillion for the Austrians
is limited?
Mr. CAPEHART. What does the Sen-
ator mean by "limited"?
Mr. ANDERSON. Mr. President,) will
the Senator yield?
Mr. CASE of South Dakota. I yield.
Mr. ANDERSON.. Does the Senator
find any language in the bill which
either limits the fund to Austria, limits
it to $400 million, or limits it to re-
payment?
Mr. CASE of South Dakota. No; but
I think perhaps the Senator from In-
diana might be able to point out where
it is limited.
Mr. ANDERSON. I shall be happy to
hear him say so.
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CONGRESSIONAL RECORD - SENATE 9375
ivXr. CAPEHART. Page 11 of the re-
port covers it.
Mr, CASE of South Dakota. Yes.
will I the Senator read it carefully?
Read the third clause of the first para-
graph. Do not overlook that.
Mr. CAP EHART. It provides:'.
Section 142 (b) of the act, which (teals
with the, generation of foreign currency
counterpart funds, provides that a portion
.of these funds, generally up to 10 percent,
shall be made available to the United States
for its uses and that the remainder will be
used for programs agreed ujon by the
United States and the country concerned to
carry out the purposes for which new funds
authorized by the act would themselves be
available.
report :
Section. 5 of the, bill adds, a proviso to
this. requirement permitting the use of
counterpart for other purposes agreed to
by the United States and consistent with
United States foreign policy, if the amount
of counterpart exceeds the requirements for
purposes for which new funds would be
available,
The amendment covers that. We are
specifically designating that they have
the right to use this amount.
Mr. CASE of South Dakota. That is
the clause which I wanted the Senator
from Indiana to emphasize.
Mr. CAPEHART. I read further from
page 11 of the report.
Although of general application., this
amendment is designed in particular to
make it possible for the Austrian Govern-
ment to lend 100 million counterpart Aus-
trian schillings, (approximately $4 rrdllionj
to the Austrian Hilsfand for, use in pom-
pensating former Austrian nationals who
were persecuted under the Nazi regime and
are. now residing outside Austria.
The Hilsfahd was established, for this- pre-
cise purpose by the Austrian Governent.
So far, about 30,000 claims have been filed,
and certified by the Austrian Government
for payment, mostly in amounts equivalent
to $1,000 or $2,000 and largely by persons
over 60 years of age. The Austrian Govern-
ment feels its budgetary situation permits
payment of only about one-fourth of, the
claims this year. Although Austrian law
now requires all of the claims to be paid
eventually, it is desirable that the process
be hastened in view of the advanced age
of the claimants. -
The Austrian counterpart fund exceeds the
requirements for purposes for which new
mutual security funds would be available,
and therefore qualifies under the proviso
written into the act by the committee.
Without the proviso, however, counterpart
could not be used for the Hilsfand,`because
new mutual security funds would not them-
selves be available for this purpose.
It is intended that the counterpart be
furnished the Hilsfand on, a.loan basis, so
that eventually the counterpart account will
be replenished.
Mr. CASE of South Dakota. The
Senator from Indiana has read from
the committee report the portion which
says that counterpart funds today can
be used-and in that connection I call
attention to the first paragraph-
For programs agreed on by the United
States and the country concerned to carry out
the purposes for which new funds authorized
by the act would themselves be available.
That is what counterpart funds can
be used for today. Ten percent oi' them
is set aside for the use of the United
States. The balance of the counterpart Mr. CAPEHART. The Senator. frofn
funds today can be used for the pur-
poses authorized by the act for the
money we appropriate.
However, now section 5 adds a pro-
viso which would permit the use of
counterpart funds for other purposes-
that is, purposes other than the pur-
poses set forth in the mutual aid acts;
In other words, for purposes other than
military assistance and other than de-
fense support and other than economic
assistance.
What are those purposes? Who can
tell? Only one purpose has been set
forth here tonight, namely, in the case
of $4 million for Ausia.
A little while ago the Senator from
Indiana was suggesting that there was
some limitation in. this case, and that
all, the bill did was take care of the
Austrian situation. But he has read
paragraph 3 on page 11 of the report,
which begins as follows:
Although of ? general application, this
amendment is designed in particular to
make it possible for the Austrian govern-
ment-
And so forth. But that paragraph be-
gins with the words "Although of general
application"-in other words, for any
purpose.
What Member of this body can imagine
the uses for these funds that might be
conceived of or imagined by some person
in the executive branch. Over a course
of years the mutual aid program has
been expanded, and there have been new
purposes and new countries and new
areas, all in connection with expanding
the program. All those new ones have
been brought in; but they do not cover
all the purposes for which these excess
funds may be used. They may also be
used for other purposes, purposes for
which, the new funds authorized by this
act would not be available. In other
words, they may be used for some un-
imagined purpose, some purpose the
committee has never considered, other
than in the one instance of the $4 mil-
lion, of a possible total of $400 million,
for Austria, and of a possible $710 million
for bther countries throughout the world.
Mr. CAPEHART. But the report
states, in part:
Section 5 of the bill adds a proviso to this
requirement permitting the use of counter-
part for other purposes agreed to by the
United States and consistent with United
States foreign policy-
And so forth. That is the way we are
now spending counterpart funds, under
existing law.
Mr. CASE of South Dakota. No; we
are not, because the purposes for which
counterpart funds today may be used
are those for which direct appropriations
can be made.
In the paragraph just ahead of that
one-I refer to the first paragraph the
Senator from Indiana read-on page
11-it is pointed out that the remainder
of the counterpart funds, other than the
10 percent, is available for use for pro-
grams agreed on by our country and by
the country concerned to carry out the
purposes for which new funds authorized
by the act would themselves be available.
South Dakota is correct, except here we
are talking about funds the Austrian
Government owns and controls, but can-
not spend, except with the approval of
the United States. We are not talking
about the 10 percent the United States
reserves.
Mr. CASE of South Dakota. But we
are talking about not merely the $4 mil-
lion out of the $410 million Austria has;
we are also talking about $710 million
worth of funds scattered among all the
other countries I have mentioned.
Mr. WILLIAMS. Mr. President, will
the Senator from South Dakota yield
to me?
Mr. CASE of South Dakota. I yield.
Mr. WILLIAMS. The Senator from
Indiana has stated that this is limited
to Austria alone. But I point out that
section 705 has no such limitation.
Therefore, when we vote, we shall vote
on the provisions of the bill, not on the
report.
Mr. CASE of South Dakota. But even
the report does not say it is limited to
Austria.
Mr. .WILLIAMS. That is correct.
Austria is, in this case, only one of the
many.
Mr CASE of South Dakota. Further-
more, the third paragraph to which I
have referred begins with the words
"Although of general application."
Mr. WILLIAMS. That is correct.
Therefore, there is no limit.
Mr. ANDERSON. Mr. President, will
the Senator from South Dakota yield to
me?
Mr. CASE of South Dakota. I yield.
Mr. ANDERSON. Let me point out
that not long ago we passed a piece of
proposed legislation that the Finance
Committee had considered very care-
fully, and the Senator from Delaware
had worked on it. We adopted lan-
guage which was agreed to by everyone
as being proper to accomplish the spe-
cific purpose; and the bill was passed.
But then the agency, administering it
said, "We do not believe this should
have been the purpose of the legisla-
tion."
So even though the report may con-
tain limiting language-although I do.
not believe the report limits this in any
way-I do not believe we can depend on
it to limit the way in which this provi-
sion will be carried out.
Mr. CASE of South Dakota. Yes.
The report says, in effect, "The Aus-
trians can be taken care of by means of
the $4 million which has been ear-
marked for that purpose; to that extent,
and, to that extent only, the Austrians
can be taken care of."
Mr. CAPEHART. 'But the funds in-
volved here are not the 10-percent
owned by the United States. Instead,
they are the counterpart funds which
are owned by the respective countries-
funds over which the United States has
absolutely no control, except it can veto
the purpose for which the other coun-
tries may wish to spend the money.
The Austrian Government wishes to
spend $4 million for the purpose set
forth in this , instance; but those are
counterpart funds of the Austrian Gov-
ernment, over which we have no control.;
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X9376 CONGRESSIONAL RECORD - SENATE June 6
Mr. CASE of South Dakota. If it were use of the funds, but so to provide for mittee give it further consideration, in-
limited to ? the Austrian Government's their use that we shall know what they stead of jeopardizing the enactment of
counterpart funds, I would not say an- are going to be used for and that they this legislation. Does the Senator from
other word about this matter. will be used sensibly. South Dakota agree with that conclu-
Mr. flu P'H>tFY. Mr. President, will Mr. CASE 'of South Dakota. That is sion?
the 'Senator from South Dakota yield to right, and so we shall be assured that Mr. CASE of South Dakota. Not
me? the funds will not be squandered or used quite, because I do not think there was
Mr. CASE of South Dakota. I yield. for a purpose which Congress has not any intended deception. There may
Mr. HUMPHREY. I believe the Sena- approved. have been a failure to point out all the
for from South Dakota has been of very Mr. BUSH. Mr. President, will the Implications of the proviso given in sec-
great assistance to the Senate. I, too, Senator yield? tion 5, but I do not think there was de-
am very mifcch disturbed about this pro- Mr. CASE of South Dakota. I yield. ception. In fact the committee report
vision. I have said this before publicly, Mr. BUSH. Would not this amend- did use the words "although of general
and also privately to some of my col- ment to the pending amendment meet application," and that should put us
leagues. the situation? -It would be as follows: on guard that the possible use of the
I wonder whether there could be in- On page 35, line 10, after the word counterpart funds under the proviso
cluded a proviso to the effect that when- "amounts" insert the words. "not in ex- was not limited to the Austrian case.
ever there is an agreement as to the use cess of $4,000,000." Mr. ANDERSON. Mr. President, will
of these funds, other than in the case of In view of the way the report reads, the Senator yield?
the funds which have been the subject of these funds are pinpointed for a special Mr. CASE of South Dakota. I'yield.
recent agreements, there will be a period situation, which has been outlined by Mr. ANDERSON. The Senator from
of time in which a report must be made the distinguished Senator from Nevb South Dakota is a very fine parliamen-
to the respective congressional commit- York [Mr. JAVIT5]. Inasmuch as the tarian. I wonder how he would apply
tees, in `the same way that similar re- committee has pinpointed the situation, the amendment which has been sug-
ports -are` made in regard to atomic- it is,perfectly proper for the bill to limit gested by the distinguished Senator
energy proje`,ts and In regard to water the amount. If the Senator will permit from Connecticut to an amendment
projects in connection with agriculture. me, I should like to send to the desk this which strikes the whole section. Does
I believe the Senator from South Da- amendment, provided he has completed the Senator mean the amendment
kota is concerned lest someone in the his statement. should be offered as a substitute?
State Department proceed, without pay- Mr. CASE of South Dakota. I think Mr. CASE of South Dakota. No. It
ing any attention to the expressed the amendment would improve the pro- would be a perfecting amendment, in my
'wishes and stated plans of the Congress, viso in the bill substantially. it would judgment, and would be entitled to be
to designate the use of these funds with- take care of the immediate situation. voted on beforethe vote on the amend-
out any control whatever by Congress or However, I think there is merit in the ment which would strike the section.
without any review by Congress, or with- suggestion of the Senator from Minne- Mr. ANDERSON. That would be a
out any opportunity on the part of Con- sota that it be possible to use the funds perfecting amendment to an amend-
gress to evaluate the purpose and to for other purposes, provided they have ment.
decide whether it is a constructive one. the approval of the appropriate com- Mr. CASE of South Dakota. The Sen-
So, if we add a proviso which *ill re- mittees. ator from South Dakota was advised
quire that before any such agreement is The PRESIDING OFFICER. The that the original amendment was being
consummated, a period of time of, let us Chair should like to inquire whether the considered as original text for the pur-
say, 30 days must elapse, during which Senator from Connecticut has. offered pose of amendment., Therefore, a mo-
the State Department must report to the the amendment or desires to offer the tion to perfect an amendment to a Para-
Appropriations Committees of the Sen- amendment? graph it is proposed to strike out would
ate and the House of Representatives, Mr. BUSH. Mr. President, I do not take precedence.
for their review, that will give us an have the floor. I send the amendment Mr. ANDERSON. Does not the lim-
opportunity even further to tighten up to the desk. I shall call it up after the station suggested by the distinguished
this provision in the conference commit- Senator has completed his remarks. Senator from Connecticut allow $4 mil-
tee, if there. is any need to do so. Mr. DWORSHAK. Mr. President, will lion to be available to every nation and
Mr. CASE of South Dakota. Person- the Senator yield? any nation, rather than a specific
ally, I think that would be a great im- Mr.,CASE of South Dakota. I yield. amount?
provement. I do not know whether the Mr. DWORSHAK. ,I think the Sena- Mr. CASE of South Dakota. I think
Senator wants to say 30 days, or perhaps tor from South Dakota and the Senator It would. But in the light of the,com-
60 days, but, in any event, a reasonable from Louisiana have rendered outstand- mittee report, it would be so earmarked.
time so the committee-and I would ing service in calling this rather dufious that it would be followed by the MSA.
suggest the Committee on Foreign Re- and questionable procedure to the at- Mr, ANDERSON. It could very easily
lations. as well as the Committee on Ap- tention of the Senate. However, I do be taken care of by inserting a comma
propriations-can receive a report as to not think, we ought to proceed to remedy after the language in the quotation
the purposes for which the money is to the apparent ambiguity, because a few marks, and putting in a proviso limiting
be spent, so that there will be some op- moments ago the chairman of the com- the total amount to all nations to $4
portunity for Congress to express itself. mittee chided Members of this body, who million.
Mr. HUMPHREY. I think 60 days were not members of the Foreign Rela- Mr. BUSH. I did have it that way,
would be desirable, and would give tions Committee, for trying to write leg- but either way accomplishes the purpose.
plenty of time to have a' proper study illation on the floor of the Senate. If I shall be glad to change it if the Senator
and review, and would not hold up the in the wisdom-and I do not question from New Mexico wants it that way. In
paperwork which would be involved. I the wisdom-of the great Committee on either case it is a limitation, in view of
think the suggestion of the Senator from Foreign Relations, it reported the bill in what the report says that the money is
South Dakota that there be a review by good faith and as a result of its sound pinpointed for a specific purpose. That
both the authorization committee as judgment, as it viewed the bill, I ques- is what the committee put in the bill.
well as the Appropriations committee is tion whether we should make an effort Let. us limit it and pinpoint it and go
a desirable one. to correct it on the floor, ahead and vote on it.
I have suggested to the staff member, Does the Senator from South Dakota Mr. CURTIS. Mr. President, will the
in consultation' with the distinguished agree with me that there has been a Senator yield?
Senator from New Hampshire and the glaring deficiency, if not perhaps unin- Mr. CASE of South Dakota. I yield.
distinguished Senator from New York, tentional deception, in the presentation Mr. CURTIS. To whom do these
that we ought to try to draft a provision of the report explaining this particular counterpart funds belong?
which would accomplish the purpose procedure in the handling of counter- Mr. CASE of South Dakota. A portion
which the Senator from South Dakota part funds? The only wise procedure is of them belongs to the United States.
has outlined. As I see it, what the Ben- to reject this particular provision, send The balance of the funds remains in the
ator wants to do is not to prevent the it back to committee, and let the com- , possession of the recipient country, but
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may be expended only with the approval
of the. United, States.
Mr. CURTIS. How much belongs to
the United States?
Mr. CASE of South Dakota. Ten per-
cent, at least.
Mr. CURTIS. How much does that
amount to?
Mr. CASE of South Dakota. I do not
know whether the particular balance
sheet we have represents the portion
after the 10 percent has been taken into
consideration. I suppose we would have
to go back to the original amount.
Mr. CURTIS, Approximately how
much belongs to the Government?
Mr. CASE of South Dakota. If we
could assume that the $710 million is the
amount of the counterpart funds, with-
out the subtraction of 10 percent, which
would,be $71 million, it would be $710
million less $71 million.
' Mr. CURTIS. But the $71 million or
thereabouts belongs to the United
States?
Mr. CASE of. South Dakota. Yes.
Mr. CURTIS. Is that a part of the
assets of the Treasury?
Mr. CASE of South Dakota. I think
it is, but, in`-effect, it has been appro-
priated by prior acts, in that the 10 per-
cent has.been made available for ex-
penditure, by our embassies.
Mr. CURTIS. But it is part of the
assets of the Treasury?
, Mr CASE of South Dakota. it cer-
tainly is. It can be expended only by
thg Treasury of the United States.
Mr. CURTIS. According to the bill as
written, assuming it is passed, can the
money be spent without an appropria-
tion?
Mr. CASE of South Dakota. I think it
can, but that opinion is based on' the
recollection that the authorization of
the expenditure of 10 percen of the
counterpart funds -is carried ih prior
MSA acts.
Mr. CURTIS. The Constitution. Is
quite specific on that point. It provides
that no money shall be drawn from the
Treasury except in consequence of ap-
propriations made by law. Because of
the fact that away back in some previous
year an appropriation was made, and by
reason of that appropriation certain
other transactions took place and money
again flows to the Treasury, certainly the
distinguished 'Senator from South Da-
kota does not take the position that the
earlier appropriation grants authority to
continue to spend that money without
appropriation.
Mr. CASE of South Dakota. The Sen-
ator from South Dakota perhaps would
like to take the position which the Sen-
ator from Nebraska suggests, but he doep
not believe he could, for this reason: The
basic foreign-aid acts authorize appro-
priations to be made for certain pur-
poses, and within. that authorization
there was the proviso for the 10-percent
counterpart funds which would be ex
pendable for certain purposes. Such ac-
tion, in itself constituted an appropria-
tion resolution.
Mr. CURTIS. That is an authoriza-
tion.
Mr. CASE of South Dakota. No. I
think that action under the interprets-
No. 91-11
CONGRESSIONAL RECORD - SENATE
tions of the House of Representatives, at
least, would constitute a continuing ap-
propriation of the 10 percent.
Mr. CURTIS. I would seriously ques-
tion, it if is an asset of the Treasury, that
it can be spent without being appropri-
ated.
Mr. YOUNG. Mr. President, will the
Senator yield?
Mr. CASE of South Dakota. I yield.
Mr. YOUNG. The usual arrangement
in respect to Public Law 480 funds is that
20 or 30 percent is set aside for United
States use, with the ? rest of the funds
loaned to the respective countries. The
funds are not given to the other country,
but remain an asset of the United States
Government.
Mr. HUMPHREY. Mr. President, will
the Senator yield?
Mr. CASE of South Dakota. I yield
to the Senator from Minnesota.
Mr. HUMPHREY. I think it is very
important that we do not misguide the
RECORD about counterpart funds, about
who owns them, and about how much in
foreign currencies is owned by the United
States.
Public Law 480 funds are foreign cur-
rencies generated from the sale of sur-
plus commodities, and those currencies
are owned specifically and entirely by
the United States.
Mr. CASE of South Dakota. The Sen-
ator. Is correct.
Mr. HUMPHREY. Those currencies
may be loaned under agreements. How-
ever, the counterpart funds are funds
10 percent of which are owned by the
United States and 90 percent of which
are owned by the other country; that is,
the partner country or the recipient
country.
Mr. CASE of South Dakota. The
funds are owned subject to an expendi-
ture by agreement.
Mr. HUMPHREY. The funds are
owned subject to our agreement as to
their expenditure.
In the Instance of Austria, we are
talking about funds which are Austrian
funds, to the expenditure of which we
must agree.
We are not talking about American
funds, but we are talking about Austrian
funds. Under-the nature of our agree-
ments with Austria, because of former
economic assistance, we have some con-
trol over expenditures.
I am not saying that the Senator from
South Dakota is not making a very valid
argument in terms of programing funds
over which we have control, but the
Senator is not talking about money
owned by the United States.
Mr. CASE of South Dakota. Mr.
President, I yield the floor.
Mr. BUSH. Mr. President-
The PRESIDING OFFICER. The
Senator from South Dakota has yielded
the floor. The Chair recognizes the Sen-
ator from Connecticut.
Mr. BUSH. Mr. President, I call up
the amendment I previously sent to the
desk.
The PRESIDING OFFICER. The
amendment will be stated for the in-
formation of the Senate.
The LEGISLATIVE CLERK. On page 35,
line 10, after the word "amounts" it is
9377
proposed to insert "not in excess of
$4,000,000."
Mr. BUSH. Mr. President, the whole
purpose of,the amendment is to do what
the committee intended to do, namely,
to provide a limitation of $4 million.
The committee report states the purpose
for which the money is to be used.
There is nothing more to say about it, so
far as I am concerned.
SEVERAL SENATORS. Vote! Vote! Vote!
Mr.'BUSH. I hope the Senate will
adopt the limitation and agree to the
amendment.
Mr. JAVITS. Mr. President, will the
Senator yield?
Mr. BUSH. I yield to the Senator
from New York.
Mr. JAVITS. Mr. President, I should
like to express my gratitude to all of my
colleagues for helping clarify this matter
for the people who really deserve this
help. My puropse is very limited, as I
stated quite clearly.
Mr. DWORSHAK. Mr. President, I
certainly hope that we shall have some
assurance from the chairman of the
committee or members of the Committee
on Foreign Relations as to whether this
amendment receives their approbation.
I would not want the Sesiate to adopt an
amendment unless the amendment has
such approval.
Does the Senator from Connecticut
have such assurance?
Mr. BUSH. I have no assurance, but
I think the vote will tell the story. With
the amendment in the bill I have no
doubt that the bill will go to conference
and be straightened out in a manner sat-
isfactory to all concerned.
Mr. GREEN. Mr. President, I think
this debate has been very profitable. We
are considering an exception to the gen-
eral rule that we ought not write legisla-
tion on the floor of the Senate. I think
this is a good exception. The limitation
of $4 million is a good limitation. We
can postpone action on other aspects of
the matter to some other time and some
other place.
I accept the amendment to limit the
amount to $4 million, and provide for
its disposition.
The PRESIDING OFFICER. The
Chair is advised that the perfecting
amendment offered by the Senator from
Connecticut [Mr. BUSH] must be voted
on prior to the vote on the amendment.
offered by the Senator from Louisiana
[Mr. ELLENDERI.
Mr. ELLENDER. A point of order,
Mr. President.
The PRESIDING OFFICER. The
Senator will state it.
Mr., ELLENDER. My amendment is
pending, Mr. President. What right
does the Senator from Rhode Island have
to accept an amendment, when there is
pending an amendment I offered?
The PRESIDING OFFICER. The
Chair is advised that the amendment
offered by the Senator from Connecti-
cut. [Mr. BusHl is intended to perfect the
language which the amendment offered
by the Senator from Louisiana pro-
poses to strike. Therefore, it is proper
to proceed first to the consideration of
the perfecting amendment.
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 ' Mr. BUSH. Does not the Senator
think the amendment which would limit
the whole amount to $4 million answers
the question the Senator is propounding?
Mr. LAUSCHE. The point I am try-
Ing to make is that according to the Sen-
ator from Oregon the State Department
said, "Do not mention the $4 million;
write this in as general language in the
bill."
Mr. BUSH. If the Senator will yield
further, I should like to point out that in
the report, which is already a public
document, the whole purpose is spelled
out in great detail.
Mr. LAUSCHE. Then I ask the Sen-
ator from Connecticut: Why was It not
originally written into the bill, if the rea-
son is not in accordance with what the
Senator from Oregon has said?
Mr. CASE of South Dakota. Mr.
President, will the Senator permit me to
answer that question?
Mr. LAUSCHE. I yield.
Mr. CASE of South Dakota. In my
opinion, it would give the State Depart-
ment a blank check to spend it all.
Mr. ANDERSON. Mr. President, will
the Senator yield?
Mr. LAUSCHE. I yield.
Mr. ANDERSON. Is not the present
situation a good illustration of the old
quotation-
Oh, what a tangled web we weave
When first we practice to deceive.
Mr. LAUSCHE. One further thought
and I shall be through. This is the first
revelation of the problems which con-
front the Congress as these counterpart
funds accumulate. Eyes will be directed
toward those - funds. Means will be
adopted to reach them. The committee,
recognizing that fact, used general lan-
guage instead of specific language.
Mr. ERVIN. Mr. President, will the
Senator yield?
Mr. LAUSCHE. I yield.
Mr. ERVIN. I should like to ask the
distinguished Senator from Ohio if he
can think of any reason why counter-
part funds should be used to compensate
the victims of the Nazis in the Second
World War, and not used to compensate
the victims of the Japanese in the Sec-
ond World War.
Mr. LAUSCHE. I think the question
answers itself.
Mr. President, I believe that this ques-
tion is of such significance that it ought
not to be legislated upon on the floor
of the Senate tonight.
Mr. SPARKMAN. Mr. President, will
the Senator yield?
Mr. LAUSCHE. I yield the floor.
The PRESIDING OFFICER. The
Chair recognizes the Senator from
Alabama.
Mr. SPARKMAN. Mr. President, I do
not believe the committee intended to
practice any deceit. If Senators will
refer to page 11 of the report of the com-
mittee, it will be seen that the report
fully sets forth just what was intended.
I invite attention fo the fact that this
provision relates only to that portion of
counterpart funds over and above other
purposes for which the funds could be
available. That, too, is set out In the
committee report.
June 6
Mr. LAUSCHE. Let me correct the
Senator from Alabama. I made no state-
ment on this subject until a member of
the committee stated that, at the sug-
gestion of the State Department, it was
deemed advisable not to mention the $4
millfon in the bill. That is the basis upon
which I say that there was a fear to re-
veal what was happening.
Mr. SPARKMAN. The only thing I
am trying to say is that the report of
the committee, on page 11, states the
situation clearly. If the Senator will
take time to read It, he will certainly
see that a full explanation was given.
The distinguished Senator from Ohio
served as Governor of his State for a
good many years. He knows that often
legislation affecting only 1 county, i
city, or 1 particular subject, is enacted
as general legislation. That happens to
be what was done in this instance. The
provision was written in the form of gen-
eral legislation, but it had specific appli-
cation,-and that specific application was
set forth fully, clearly, and I believe
distinctly, on page 11 of the committee
report. Therefore, I say that the com-
mittee is not trying to conceal anything.
It is not trying to deceive. I believe it
has made a full and open disclosure.
The only question is whether or not we
wish to apply this form of compensation.
Mr. SPARKMAN subsequently said:
Mr. President, I ask unanimous consent
that, in connection with the remarks I
made a few moments ago relating to this
subject, there be printed as a part of
those remarks the entire section 8, found
on page 11 of the committee report;
also that there be printed a paragraph
beginning on page 15 of what was at the
time confidential information before the
committee In the form of a report which
the committee had before it, and con-
tinuing to page 17, setting forth the po-
sition of the executive branch on the so-
called Javits amendment.
The PRESIDING OFFICER. Is there
objection to the request of the Senator
from Alabama?
Mr. CASE of South Dakota. Mr.
President, reserving the right to object-
and I do not intend to object-I merely
wish to observe that when the question
of deception was raised earlier on the
floor I specifically denied that there was
any attempt on the part of anyone to
deceive. Also section 8 was placed in
the REcoRD by the Senator from Ala-
bama.
The PRESIDING OFFICER. Is there
objection to the request of the Senator
from Alabama?
There being no objection, the excerpts
were ordered to be printed in the RECORD,
as follows:
8.-USE OF COUNTERPART SPECIAL ACCOUNT
(SEC, 5)
Section 142 (b) of the act, which deals with
the generation of foreign currency counter-
part funds, provides that a portion of these
funds, generally up to 10 percent, shall be
made available to the United States for its
uses and that the remainder' will be used for
programs agreed on by the United States and
the country concerned to carry out, the pur-
poses for which new funds authorized by the
act would themselves be available.
Section 5 of the bill adds a proviso to this
requirement permitting the use of counter-
part for other purposes agreed to be the
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CONGRESSIONAL RECORD -SENATE
Mr. ELLENDER. Certainly.
Mr. MORSE. Mr. Presidents ,
'The PRESIDING OFFICER. The
Senator from Oregon.
Mr. 'MORSE. I think it should be
said for the RECORD that the Senator
from Connecticut is carrying out what
was the original intention and desire of
the Committee on Foreign Relations. I
*think I have heard no one say it, and
there should be a statement as to why
We did not write such language into the
bill. My recollection is that the reason
the committee did not write the language
In the bill was a recommendation of the
State Department Itself. The Depart-
ment preferred the more general lan-
guage because it was thought if it were
specified, it might establish an undesir-
able-precendent and might invitein the
future other specific instances of this
type.
jt think we have learned a good lesson.
Some of us thought we should have kept
the limitation In the bill In the first
place. The amendment now offered by
the Senator from Connecticut will put
the Committee on Foreign Relations in
the position where at least most of us
thought we ought to be in the begin-
The PRESIDING OFFICER. 'The
Senator will suspend for a moment.
At this time `the Chair wishes to ad-
vise the Senate, apropos of the Inquiry
Made by the Senator from Louisiana,
that the last paragraph on page 28 of
Senate Procedure reads as follows:
Pending a motion to strike out, an amend-
ment perfecting the part proposed to be
stricken out, or an amendment inserting
other language in lieu of that proposed to
be stricken out, is in order and has preced-
ence over the motion to strike out.,
Mr: LAUSCHE. Mr. President-
The PRESIDING OFFICER. The
Senator from Ohio is recognized.
Mr. LAUSCHE. Mr. President, I hope
my colleagues will consider the signifi-
cance of the implication contained in the
statement made by the Senator from
Oregon. The committee, when it wrote
the bill, chose general language because
It feared, if it pinpointed the $4 million
payment authorized, a precedent would
gibe established, bringing a deluge of
'
The purpose in using
similar claims.
general language-which procedure was
suggested, as has been said, by the State
'Department-was to conceal the fact
that $4 million of the money was to be
used to pay persons who were injured
by the Nazi government in the Second
World War.
When the State Department made
that proposal, it undoubtedly had in
mind that if it became generally known
this lver-e to be done many demands
would be made of a similar chatacter.
What the committee feared to do we pro-
ceed now 1o announce to the world. We
ate to pay claims which justly existed
ag afrist the Nazis for damages inflicted
ilpnncitizenswithin some other country.
lidr: $USH. Mr. President, will the
Senator Yield'?
. l erd `to tlieSeliator from Connecti-
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??- ?? - vvi~vxv;JJiVl~IL"!.L AJC\.VAL - J1G1VLil, . 9379
United States and consistent with United the Javits proposal, but it made its sug- not try to deceive the Senate. Perhaps
States foreign policy, if the amount of coup- gestion with regard to the use of gen- we did not use the King's English as
terpart exceeds the requirements for purposes eral language. My recollection is that clearly as we should have, but there is
for which new funds would be ayailable,
Although of general application, this it was brought"out, either in the memo- nothing in the language that indicates
amendment is designed in particular to make randum or by a staff report, that the deceit. What we tried to do was to carry
it possible for the Austrian Governer. ent to State Department thought the general out the recommendation of the State
lend loo million counterpart Austrian, schil- language was preferable, for the reasons Department. In this particular case we
hugs (approximately $4 million) to the Aus- which I have heretofore stated. thought it made good sense. The Sena-
trian Hilsfand for use in compensating Then the Senator from. New York tor from New York made no serious ob-
former Austrian nationals who were perse- [Mr.eeJAVITS] was called before the com-
cuted under the Nazi regime and are now re- mitt the s o. to it, so far as I know. That is
siding outside Austria. , as I recall. He made a state- the story.
The Hilsfana was establisl}ed for this pre- ment in explanation of his amendment., Mr. JAVITS. Mr. President, I should
cise purpose by the Austrian Government. The suggestion was,made that the pro- like to introduce some material and have
So far, about 30,000 cls.ims have been filed, posal be modified in accordance with the it made a part of the RECORD.
and certified by the Austrian Government for suggestions of the State Department Mr. President, I ask unanimous con-
payment, mostly in amounts equivalent to memorandum. I think I am correct sent to have printed in the RECORD at
one or two thousand dollars and largely by when I report that the Senator from this point the original amendment which
persons over 6.0 years of age. The Austrian. New York had no serious objection to was
Government feels its budgetary situation per- printed as I had proposed it to the
mits payment of only about one-fourth of the adoption of the language proposed, committee, and which had application
the claims this year. Although Austrian law because-he recognized that the objective and specifically said it related only to
now requires all of the claims to be paid of his proposal would be met thereby. the $100 million in Austrian schillings
eventually, it is desirable that the process one further comment. It was brought deposited in the special account.
be hastened in view of the advanced age of, out by the Senator from Indiana [Mr. There being no objection, the text of
the claimants.. CAPEHART] and 1 or 2 other Senators in the amendment was ordered to be
The Austrian counterpart fund exceeds the this debate, but it ought to be pin-
requirements for purposes for which new pointed now, as we approach a vote, in 2, RECORD, s follows:
mutual security funds would be available, , On page , between lines 3 and 4, it is
and therefore qualifies under the proviso that we reserved the right to exercise proposed to insert the following:
written Into the act by the committee. what we might describe as a veto power. "SEC. 4. Title I, chapter 4, of the Mutual
Without the proviso, however, counterpart The purposes for which counterpart Security Act of 1954, as amended, is amended
could not be used for the Hilsfand, because funds can be spent, under. the original by inserting at the end of section 141 (b) a
new mutual security funds would not them-_ agreement, are exceedingly broad. We new sentence as follows: `In addition to the
selves be, available for this purpose, usually think of them in relation to pay- purposes referred to in clause (iii) , an
It is intended that. the counterpart be fur- frig for military expenses, defense
nished sup amount equal to 100,000,000 Austrian schil-
the Hilsfand on a loan basis, so that lines deposited in the Special Account estab-
eventually the counterpart account will be port expenses, and the like, but they are lished by the Government of Austria shall be
replenished: not limited to those purposes. They available, pursuant to agreement between
EXECUTIVE BRANCH POsrTI6N ON THE FORE- cover highways, buildings, and a great such Government and the Government of
GOING JAVITS AMENDMENT many facilities in the country of origin, the United States, for loans t0_ the?Austrian
The executive branch favors the use of What the Austrians are saying is, "We Hilsfand for its use in making payments to
Austrian counterpart for this purpose. It have these old people. They are not former Austrian nationals who were perse-
Austrian
of course, be necessary to obtain the going to live much lodger. We think we cuted and are now residing outside Austria.,
approval of the Austrian Government for this have some money coming. Our fiscal Renumber sections 4 to 9, inclusive, as 5
use of counterpart. It is believed, however, to 10, respectively.
position this year enables us to pay them
that it is undesirable to, enact special provi- 25 percent this year out of our own Mr. CAPEHART. Mr. President, I
sions for, special groups of persons, and that budget; but if you will authorize us to think we had better take another look at
it would be preferable to provide more gen-
erally that excess counterpart may be used use our own schillings in the counterpart the Bush amendment, because as it is for other purposes which are consistent with fund, so that we can pay them 100 per- worded now, I believe the $4 million will
the foreign policy of the United ?tates. The cent this year, we will repay that loan apply to every country which has coun-
executive branch, therefore, recommends the into the counterpart fund in 4 years." terpart funds.
adoption of the proviso at the end of section This amounts, in fact, to our author- Mr. ELLENDER. That is what I
142 (b) (iii), indicated by black brackets as Izing the Austrians to borrow their on pointed out.
follows: money for a period of 4 years, so that Mr. ANDERSON. Yes; `it does apply.
(iii) utilize the remainder of the Special they can pay the entire amount this It opens the gates.
Account ed for programs agreed by the year. This money is coming back into - Mr. CAPEHART. Therefore I believe
United States carry y out the purposes for which new funds authorized by this act the fund. We are not. giving away the we would be much better off to leave the
would themselves be available [: Provided, money. This is Austrian money, in the amendment as it was reported by the
That if amounts in such remainder exceed first place. Under those circumstances, committee, because otherwise it will
the requirements of such programs, the :fecip- I think we ought to say, under our veto apply to every country.
lent nation may utilize such excess amounts' power, "Very well; we will approve your Mr. WILLIAMS. Mr. President, I ask
for other purposes agreed to by the United proposal, with the understanding that unanimous consent that section 5 of the
States which are consistent with the foreign you will pay the money back, and that bill, found at page 35, be,printed in the
policy of the United States]."
you are going to use it for this specific RECORD at this point. I call particular
,Mr. MORSE. Mr. President, I wish purpose. We think the objective is a attention to the fact that at no point in
to supplement the remarks I made a few laudable one, and we will not exercise the bill or in this section is there any
moments ago so that the RECORD may our veto power in this instance." reference to the repayment of these
be perfectly clear. Mr. SPARKMAN. Mr. President, will funds.
I think we need to bear in mind the the Senator yield? There being no objection, the section
procedure followed by the Foreign Re- Mr. MORSE. I am ready to yield the of the bill was ordered to be printed in
la,tions Committee, which I think is floor, but I yield to the Senator from the RECORD, as follows:
common practice among other commit- Alabama. SEC. 5. Title I, chapter 4, of the Mutual
tees of the Senate, when it comes to Mr. SPARKMAN. Is it not true that Security Act of 1954, as amended, which
consideration of amendments proposed; all the facts which the Senator has contains general provisions relating to mu-
by colleagues in the Senate, pointed out are set forth in the commit tual defense assistance, is amended by in-
When the Javits amendment came to tee report? serting before the period at the end of sec- tion 142 (b) n (iii), relating co the special
the Foreign Relations Committee it was tor. MORSE. The Senator is correct. foreign currency account, a colon and the
the
sent to the State Department for com- . Mr. SPARKMAN. In a very under- following: "Provided, That if amounts in
merit. That is done in the. case of all standablp manner. such remainder exceed the requirements of
4 amendments, Mr. MORSE. We tried to make that such programs, the recipient nation may
The State Department sent baC1C its clear on page 11. My colleagues on the utilize such exce ~ amounts for other pur-oses
eed to report. My recollection is that it had Foreign Relations Committee, for whom are consistent with the foreign policy of the
no serious objection to the objectives.of I have the most affectionate regard; did United States."
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 The PRESIDING OFFICER. The My amendment also strikes from the The PRESIDING OFFICER. The
question is on agreeing to the 'amend- bill the sum of $2,750,000 to build office question is on agreeing to the amendment
ment offered by the Senator from Con- space and homes in Libya, Nigeria, of the Senator from Louisiana [Mr. EI,-
necticift, as a perfecting amendment. Sudan, Yemen, Taiwan, Laos, and Indo- LENDER]. (Putting the question.)
[Putting the question.] The "noes" ap- nesia as well. The Chair is in doubt.
pear to have it. We are going too far. Such proposals Mr. ELLENDER. I ask for a division.
Several Senators requested a division, as this tend to make the program per- The PRESIDING OFFICER. A divi-
On a division, the amendment was re- manent. Here we are establishing of- sion is requested.
4ected. flees for the people who administer the On a division, the amendment was re-
The PRESIDING OFFICER. The program. All of us hope that, the pro- jetted.
committee amendment is open to fur- gram will be ended in the next 2 or 3 , Mr. ELLENDER. Mr. President, I call
flier amendment. years. However, the taxpayers' money is up my amendments designated '6-5-
Mr.' CASE of South Dakota. Mr. to be used to build offices and to build 58-C," "6-5-58-E," "6-5-58-F," and
President, I offer an amendment, on swanky homes, I presume, far beyond "6-5-58-G." I ask unanimous consent
page 35, line 12 of the bill, to strike out the kind of houses that are built in the that the amendments not be read, but
the period and insert a semicolon, and countries where our people work. It that they be printed and- considered _en
,Add the following words: strikes me that as long as our employees bloc, because they deal with the same
Provided further, That any such proposed abroad get extra allowances for hard- subject.
utilization of such excess amounts shall be ship they ought to be willing to live 'n The PRESIDING OFFICER. Without
reported to the' Committee on Appropria- those countries as the other people objection, the amendments will be con-
tions and the Committee on Foreign Rela- there live. sidered en'bloc; and, without objection,
tions of the senate,' and to the Committee As I said, we started out with $12 mil- they will be printed in the RECORD.
on Appropriations and the Committee on The amendments of Mr. EL LENDER,
Foreign Affairs of the House of Represents- lion for Korea in 1956. It was increased
tives, and that such utilization shall not be to $18 million last year, and now we are considered en bloc, are as follows:
effective until 60 days after such reporting. being asked to make it $26 million. Not On page 64, line 2, strike out the period-
only that, but we are adding money to and insert the following:", except that none
"That is intended to carry out the sug- build houses and offices in other coun- of the funds authorized to be so transferred
to " givgive of the Senator from Minnesota, tries also. may be used in or for assistance to any na-
te the committees an opportunity to This, again, is a foot in the door. We tion of western Europe."
know what is being done. On page 44, line 14, before the period insert
Mr. GREEN. 'I shall be glad to accept will be called upon to spend taxpayers' the following: "and the following: 'None of
cash to build offices and homes in the the funds authorized by this subsection shall
the amendment. hope that the program can be made be used in or for assistance to any nation of
SEVERAL SENATORS. Vote! Vote! permanent. western Europe. "
The_ PRESIDING OFFICER. The I hope that my amendment will be On page 45, at the end of line 2, strike out
question is on agreeing to the amend- adopted. the period and insert "; and".
merit offered by the Senator from South The PRESIDING OFFICER. The On page 45, between lines 2 and 3 Insert
Dakota [Mr. CASE]. the following:
amendment was agreed to. question is on agreeing to the amend- "(iii) At the end of the subsection add the
The I call ment offered by the Senator from Loui- following new sentence: 'None of the funds
Mr. amendmER. Mr. President,
up my amendment MENDER. siana [Mr. ELLENDERI. authorized by this subsection shall be used
Mr. GREEN. Mr. President, this in or for assistance to any nation of western
The PRESIDING OFFICER. The. amendment would strike out authority to Europe.-
amendment amendment will be stated. use an additional $8 million of Korean on page 48, between lines 20 and 21, insert
The LEUSLATIVE CLERK. On page 52, program funds and $2,750,000 in other the following:
beginning with "$26,000;000" in line 6, (a) Section 501, which relates to trans-
it is proposed to strike out down through program funds for the construction or ferability of funds, is amended by inserting
line 12 and insert in lieu thereof acquisition of essential living quarters, before the period at the end thereof a comma
office space, and supporting facilities in and the following: 'and except that no such
$18,000,090." the countries in question. funds shall be transferred for use in or for
Mr. JOHNSON of Texas. Mr. Presi- Existing law authorizes use of up to assistance to any nation of western Europe.' "
dent, may we have the yeas and nays Redesignate subsections (a) to (d), in-
ordered on the final passage of the bill, $18 million in Korean program funds for clusive, as (b) to (e), respectively.
so that Senators may be informed? this purpose in Korea. The committee
The yeas and nays were ordered. bill raises this limit to $26 million. The Mr. ELLENDER. Mr. President, these
Mr. ELLENDER. Mr. President, the _ amendment would strike out the in- four amendments deal solely with the
crease. amounts which the President has the
purpose of the amendment is to leave The committee bill, in fact, is designed right to transfer under section 501, and
the amount which can be used out of the to do nothing more than to complete a under the bill's authority for the spe-provided to legedly Korea f vital amounts
f i aid 3-year program which was clearly cial fund and the contingency fund.
to or so-called led essential l living
planned 2 years ago when this authority The purpose of the amendments is to
quarters and officd'space and supporting ify that, notwithstanding the right
facilities at the the present figure of $18 was first granted. In the meantime, spec
of the President to transfer funds from
.million. The bill would increase this there has been no change in the situa-
figure to $26 million. tion in Korea to warrant a change in the one phase of the program to another,
I have in the past opposed the use of program, and it ought to be completed. none of those transferable funds can be_
any of these funds to build houses, to The committee bill also authorizes the used in Western Europe.
build office space, and the like, for our use of $2,750,000 of program funds in As I pointed out earlier today, the
officials, or the administrators of these other countries for the same kind of United States has spent billions of dol-
funds in the various countries where we facilities. The countries in question are lars in Western Europe in order to put
operate aid programs. Libya, Nigeria, Sudan, Yemen, Taiwan, the European countries on their feet.
'This Korean housing scheme started Laos, and Indonesia. In many of these Today the economy of Western Europe
out at `a level of $12 million 2 years ago. countries, programs are just getting is better than it has ever been in the
,Last year it was increased to $18 million. underway. In all of` them, there is a past. The industrial production of
Now our planners want $26 million. great shortage of housing, office space, Western Europe has been increased to,
It will be recalled that we had a great and other facilities such as warehouses. 168 percent of prewar levels.
deal of difficulty in Taiwan because ~ The amendment would also strike out The purpose of these amendments is
many of our workers live in compara- this authority, to make Western Europe stand on its
tive luxury, in much better homes than The programs planned axe not elab- own feet; to prevent the President from
the native officials. Yet now it is pro- orate and are badly needed. The au- using any of the special funds for West-
posed that we use aid money to build thority in the committee bill does not re- em Europe.
offices and homes for those who admin- suit in any increase in total costs. The The bill already provides large
ister this program throughout the world. amendment should be rejected. amounts of funds for Western Europe.
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CONGRESSIONAL RECORD-? SENATE
I have tried to strike out those unds,
but I have failed. Now I want to say
to the President, "'You have the' right to
make these transfers, but do not give any
part of the money to any country in
Western Europe."
Mr. President, I ask unanimous con-
sent that the four amendments may be
considered en bloc.
The PRESIDING OFFICER. Is there
objection to the request that the four
amendments be considered en bloc? The
Chair hears none, and it is so ordered.
The question now is on agreeing en
bloc to the amendments offered by the
Senator from Louisiana [Mr. ELLENDERI
The amendments were rejected.
Mr. MORSE. Mr. President, I call up
my amendment designated "5-27--58-F"
and ask that it be stated.
The PRESIDING OFFICER. The
amendment will be stated.,
The LEGISLATIVE CLERK. On page 57,
It is proposed to strike out lines 12
through 25, and on page 58, strike out
lines 1 through 9, all relating to the cre-
?ation of a new position of Under Secre-
tary of State for Economic Affairs.
Mr. MORSE. Mr. President, I have
called up the amendment because I con-
sidered myself obligated to do so in view
of the fact that in the course of the dis-
cussion in the Committee on Foreign
Relations I said I would press for action
on my amendment on the floor of the
Senate, after the amendment was re-
jected by the committee.
When the matter was first presented
in the Committee on Foreign Relations,
there was considerable support for the
position I' took in the committee, and I
felt that if the facts were as I sincerely
believed them to be at that time, I should
press for my amendment on the floor of
the Senate. I shall make a brief state-
ment, about the amendment, and then I
propose to withdraw it.
When this q estion first arose in the
Committee on Foreign Relations, it was
reported to us that the proposal for a
second Under Secretary of State posi-
tion was, in part, for the purpose of
keeping a very able man, now Deputy
Secretary of State, Mr. Dillon, one of
our finest public servants, in a position
of responsibility; and there seemed to be
reason to believe that that could be ac-
complished with greater certainty if he
were promoted to a position of Under
Secretary of State.
I did not want to -lose Mr. Dillon's
public service, but I took the position
in the committee that neither would I
favor the creation of any special posi-
tion in order to keep a man in public
service if I felt' the position itself cre-
ated administrative difficulty. At that
time I believed and understood that we
would have two Under Secretaries, of
State on a par, in equal positions, and
with equal rank. I pointed out in com-
mittee that I feared that would lead
to jurisdictional problems, it would lead
to inefficiency, and it would lead to a
'lack'of,a direct line of command in the
Department of State.
I pointed out that it had always been
My understanding that the Under Secre-
taryof State served in behalf of the Sec-
retary of State whenever the Secretary
was out of the country or for some rea-
son was incapacitated temporarily; and
I thought it would be very undesirable
to create dual positions of Under Sec-
retary of State.
My views were made known to the
Department of State; and the committee
has received a memorandum from the
Department which convinces me that
the recommendation of the Department
should be sustained, and that my
amendment should be withdrawn. I
think the RECORD should contain the.
explanation of the Department of State
in respect to the proposal to create a
second or new position of Under Secre-
tary of State for Economic Affairs. The
Department says in its memorandum:
The creation of the position of Under
Secretary. of State for Economic Affairs will
have no effect whatsoever on the role of
the Under Secretary of State. The Under
Secretary will continue, as heretofore, to
serve as principal assistant to the Secretary
of State for all aspects of the conduct of
United States foreign relations. The Under
Secretary of State for Economic Affairs is
scheduled to receive a salary of $22,000 per
annum, while the salary of the Under Sec-
retary of State is fixed at $22,500.
This shows that the present Under
Secretary of State will continue to hold
the top position under the Secretary of
State. The Department of State mem-
orandum continues:
This differentiation in salary clearly indi-
cates the subordinate position of the Under
Secretary for Economic Affairs.
On the positive side, the creation of the
ogice of Under Secretary of State for Eco-
nbmic Affairs at a level senior to that of the
Director of the International Cooperation
Administration will facilitate the'administra-
tion of the mutual security program within
the Department of State as an integral part
of the foreign policy of the United States.
It will also serve to facilitate the operations
of the Department of State in the entire
field of foreign economic policy, both in its
day-to-day relations with other govern-
ments and with other agencies of the United
States Government. The Departments of
Treasury and Commerce, both of which are
active in foreign economic matters; each
have two officials serving at the Under Sec-
retary level. It wil improve coordination of
foreign economic policy within the United
States Government. If the officer in the De-
partment of State directly concerned with
these matters holds the rank of Under Sec-
retary. Finally the creation of the position
of Under Secretary of State for Economic
Affairs will serve as an, indication both to
foreign governments and to domestic inter-
ests of the growing importance which the
United States Government attaches to prom-
lerns of foreign economic policy.
That is the entire explanation of the
Department of State.
Mr. FULBRIGHT. Mr. President-
Mr. MORSE. Mr. President, I wish to
say in conclusion, before I yield, that my
original understanding, of this new posi-
tion of Under Secretary of State for
Economic Affairs-namely, that it would
be on an equality level with the present
position of Under Secretary of State-
proves not to be the case. I accept the
explanation on that point given by the
State Department; the State Depart-
ment's memorandum now convinces me
that my original objection-had no basis
in fact.
Therefore, I am very glad to withdraw
my amendment, and to accede to the po-
sition taken by the State Department.
9381
I yield now to the Senator from Ar-
kansas. Mr. FULBRIGHT, Mr. President, I
should like to commend the Senator from
Oregon, first, for having raised this ques-
tion, because it has led to a clarification
of just what this position means. I
myself was not at all clear, during the
committee discussion and consideration,
as to what would result from this par-
ticular amendment or provision. But I
believe it is proper, and I think the Sena-
tor from Oregon was quite right in rais-
ing the question.
I also commend him for withdrawing
the amendment, because I believe the
memorandum he has read does clarify
the matter. So I think he has made an
entirely proper move.
Of course, there is a precedent for this
proposal. As the, Senator from Oregon
will recall, Will Clayton served quite sat-
isfactorily in this way, without the de-
velopment of any clash between himself
and the Under Secretary of State.
Mr. MANSFIELD. Mr. President, will
the Senator from Oregon yield to me?
The PRESIDING OFFICER (Mr.
CLARK in the chair). Does the Senator
from Oregon yield to the Senator from
Montana?
Mr. MORSE. I yield.
Mr. MANSFIELD. I, too, wish to
commend the Senator from Oregon. He
raised the question in the committee;
and now, because of his active interest in
the matter, it has been clarified.
I am glad the memorandum has been
read into the RECORD; and I am very
happy that the person who has been
designated for this new position is Mr.
Douglas Dillon, who has done such an
excellent job, following his return from
service as our Ambassador to France.
I commend the Senator from Oregon
for .his usual thoroughness and helpful-
ness.
Mr. MORSE. I thank the Senator
very much.
Mr. AIKEN., ~Mr. President, will the
Senator from Oregon yield to me?
Mr. MORSE. I yield.
Mr. AIKEN. Mr. President, although
I have no desire to have this provision
of the bill thrown out at this stage, I,
too, like the Senator from Oregon, was
somewhat apprehensive in regard to
creating, in the Department of State, a
high officer to deal with economics and
trade. It seemed to me that we were
relying too much on the Department of
State to run the economy of the coun-
try, and that it would be better for us
to strengthen the Department of Com-
merce, instead of establishing in the
State Department an agency which con-
ceivably could become more important
in the economic field than the Depart-
ment of Commerce itself.
I agreed that Mr. Dillon is undoubt-
edly a good man, and that we have little
to worry about in this instance; and I
agree that the State Department cannot
ignore commerce, but must necessarily
play an important part.
But I want the record to show that I
am somewhat . apprehensive over this
provision, and I am not quite sure that
we are doing the right thing by ac-
cepting it. In fact, in the committee I
voted-with the Senator from Oregon
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CONGRESSIONAL RECORD - SENATE June 6
and with 1 or 2 other members of the
committee-not to accept it.
Mr. MORSE. Mr. President, I want
the Senator from Vermont to know that
I shared his apprehension; but I believe
the explanation which has been made
by the State Department 'entitles it to
the benefit of the doubt.
Therefore, I now request unanimous
consent that I may withdraw my
amendment.
The PRESIDING OFFICER. The
Chair will advise the Senator from Ore-
gon that unanimous consent is not re-
quired if he wishes to withdraw" his
amendment.
Mr. MORSE. Then, Mr. President, I
advise the Senate that I have now with-
drawn my amendment.
Mr. FULBRIGHT. Mr. President,
last night, during debate on the Know-
land amendment, it was so late when
the vote was taken that I did not have
an opportunity to make a brief state-
ment pertaining to that amendment. At
this time T should like to take a few
minutes to do so.
According to the press, the Soviet
Union has recently unilaterally post-
poned for 5 years 2 credits to Yugo-
slavia, in the amount of the equivalent
of,$285 million. It is very interesting,
In view of the propaganda of the So-
`viet Union that American credits have
strings, and that theirs are without
strings, that this extreme form of coer-
cion should be used by the Soviets upon
their fellow Communists in Yugoslavia.
This action by the Soviets demon-
strates more plainly and forcefully than
anything that .I can say the determined
and ruthless policy of domination which
the Russians exercise over their satel-
lites, and even over countries which are
not considered satellites, but only
friends. The Russians may not attach
What are euphemistically called strings.
They simply demand complete sub-
servience to their policy; and if the bor-
rower refuses to knuckle under, they
simply cancel or postpone the entire
credit. That is far more than a string;
'it is a club.
It is true that, in a sense, good busi-
ness demands that certain conditions
should be imposed upon countries bor-
rowing money for specific developmental
purposes. In private practices, the
lender is entitled to require that the pro-
cedures to be followed by the borrower
should be reasonably designed to ac-
'complish the agreed purpose of the loan.
That is all that our program has ever
required; and I think it is entirely justi-
fiable, and should be required in the
future. This does not at all entail the
'subservience of the borrower to the will
of the lender, so far as major govern-
mental policies are concerned.
For the information of the Senate and
of the country, I wish to give some fur-
ther details about the status of credits
purportedly extended by the Soviet bloc
to Yugoslavia. I think this information
Is pertinent to the consideration of our
policy, not only toward Yugoslavia, but
toward other nations of the Soviet bloc,
particularly those affected by the amend-
ment proposed by the Senator from Mas-
sachusetts [Mr. KENNEDY]. I refer to
the amendment which was defeated, last
night, by a majority of one vote, as I
recall.
First. According to the newspapers,
the Soviet Union has unilaterally post-
poned, for 5 years, 2 investment credits
to Yugoslavia:
(a) One hundred and seventy-five mil-
lion dollars equivalent, 2 percent 1956-
84, in conjunction with East Germany,
for the construction of an aluminum
complex in Montenegro. This was to
have been repaid in aluminum deliveries
from the output of the project, -begin-
ning of 1962. None of this credit is be-
lieved to have been disbursed as yet.
(b) One hundred and ten million
dollars equivalent, 2 percent 1956-75,
allocated for the construction of 2 ferti-
lizer plants, 3 mines, and 1 power sta-
tion. About $7 million of this is believed
to have been disbursed, largely for
planning.
Second. Since the aluminum project
was being developed as a kind of Soviet
economic enclave in Montenegro, post-
ponement of it should hurt the rest of
the Yugoslav economy very little. But
it will present a major problem, in that
it was the major project in Montenegro,
and the Government will have difficulty
in finding something else to do there.
The Government also is supposed to have
begun work on a new port at Bar, Mon-
tenegro; and the aluminum project was
probably the main justification for it.
Third. The postponement of the $110
million credit will hurt the rest of the
economy more. Some of the projects
have been started, but not all. So far as
we know, the projects were of sufficiently
high priority that if the Government
cannot get other financing for them, it
will have to review its whole plan, to
decide what can be cut. The investment
in these projects is only 2 to 3 percent
of the total investment, but the credit
amounts to one-fifth of the total foreign
exchange financing that the Yugoslavs
need for their current 5-year plan.
Fourth. We do not know whether the
other Soviet and Soviet satellite credits
and the remaining Hungarian repara-
tions payments will also be postponed.
These total $181 million equivalent, and
are as follows:
Amount undisbursed as of December 31, 1957
[In millions of dollars]
Soviet raw materials credit, 2 percent,
1956-68-----------------------------
31
Czech investment credit, 2 percent,
1956-70 ----------------------------
45
Czech commodity credit, 2 percent,
1956-68-----------------------------
25
Polish Investment credit, 2 percent,
1956-64 -------------------------
20
Hungarian reparations-----------------
60
Total --------------------------
181
If these also are postponed, and if no
other credits are received to make up for
them, then Yugoslavia will have to make
a major revision of her economic plans.
With- the loss of all of the Soviet bloc
credits, she will have lost over half of the
foreign-exchange credits she needs to
carry out her 5-year plan.
Fifth. We also do not know whether
trade with the Soviet bloc is going to be
affected. One-fourth of Yugoslav trade
is with the Soviet bloc. While it would
be quite possible for Yugoslavia to shift
her trade away from the bloc, that would
take time. With the small Yugoslav for-
eign-exchange reserves, any interruption
in trade is a serious matter.
Mr. President, I ask unanimous con-
sent to have printed at this point in the
RECORD a further compilation of credits
from other countries in the Soviet bloc,
except Russia, to Yugoslavia.
There being no objection, the compila-
tion was ordered to be printed in the
RECORD, as follows:
SOVIET BLOC CREDITS TO YUGOSLAVIA
COMPLETELY DISBURSED Gold loan from U. S. S. R., 2 percent Inter-
est payable annually, principal to be repaid
in 1966, $16 million in United States dollars,
and $14 million in sterling: $30 million.
POSTPONED
Aluminum credit, half from U. S. S. It. and
half from East Germany, 2 percent, to cover
both foreign exchange and local currency
expenditures in constructing an aluminum
combine: smelter, powerplant, bauxite mine,
soda plant, etc. The local currency costs
were to be met by the provision of $100 mil-
lion of wheat deliveries. Repayments orig-
inally were to have begun in 1962 through
delivery of aluminum and to have lasted
to 1984. Apparently no interest was to have
been paid prior to this: $175 million.
Investment credit from U. S. S. It., 2 per-
cent, to be allocated to projects in Yugo-
slavia. Interest payments beginning 1959,
varying principal payments, last payment
1975. Payable through clearing arrange-
ments: $110 million.
STILL IN FORCE
Commodity credit from U. S. S. It., 2 per-
cent, to finance wheat, crude oil and other
commodity purchases. Interest and princi-
pal payments beginning 1959, last payment
1968. Payable through clearing arrange-
ments. As of December 31, 1957, $23 mil-
lion had been disbursed: $54 million.
Investment credit from Czechoslovakia, 2
percent, to finance purchase of equipment.
Interest and principal payments beginning
1961, final payment 1970. Payable through
clearing arrangements. As of December 31,
1957, $5 million had been disbursed: $50
million.
Commodity credit from Czechoslovakia.
Same terms as Soviet commodity credit.' No
disbursement by end of 1957: $25 million.
Investment credit from Poland, 2 percent,
to finance purchase of equipment. Repay-
ments of interest and principal to begin 1959.
Final payment, 1964. Payable through clear-
ing arrangements. No disbursement by end
of 1957: $20 million.
Mr. FULBRIGHT. Mr. President, I
place this in the RECORD because I think
there is a great misunderstanding of the
significance of the Kennedy amendment,
and I know there is misunderstanding of
the significance of the action taken by
the Soviets in postponing these loans.
During the debate last night it was
said that, of course, every year at about
this time the Yugoslavs pursue a par-
ticular course of action which is de-
signed to induce the United States to
extend credit to Yugoslavia. That may
or may not be so, although I do not be-
lieve it to be true. But, regardless of
that, the fact that the Russians have
in this instance postponed for 5 years the
2 loans totaling $285 million, at 2 per-
cent, completely negatives, in my opin-
ion, in the minds of the people of the
other countries of the world the propo-
sition of the Russians that the United
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1958 CONGRESSIONAL RECORD -.SENATE
9383
States places strings, on the loans it Court took jurisdiction and assessed that there was any legal obligation on
it makes, but that Russia does not. damages-stranger things have hap- our part.
Now it is clear that the Russians do not pened- I think we and the free world should
merely put strings on the loans they Mr. FULBRIGHT. That would be take notice of what the Russians have
make; they cancel the entire loans. very strange. Of course, I hope Yugo- done in connection with the loan to
So I think there is no greater assist- slavia will sue Russia, because that Yugoslavia. It is very significant as to
ante to a correct understanding by the, would advertise to the world just how what this country might have done in
rest of the world of the position we take! Russia treats her satellites or friends. the future if the Kennedy amendment
than the assistance given in that con- That is the purpose of my making, the had not been defeated. I think that was
nection by the action taken by Russia in. statement. I would hope Yugoslavia a great mistake. We were defeated in a
the case of the two loans which Russia, would sue Russia, but I do not think fair argument. I only hope the incident
had agreed to make to Yugoslavia, Yugoslavia would be able to collect un- with regard to Yugoslavia is merely one
I think the sginificance of that mat- less Russia wanted to pay. There is no example of what we may be able to de-
ter has been overlooked by our press; binding agreement in this field, as the velop in the course of time if this coun-
I think our press does not realize its true Senator knows. try uses its resources intelligently in this
significance. Certainly I believe the Mr. MALONE. The point I want to field.
Senate should not overlook it. Senators make is that it might set a bad precedent I regret that this administration was
should realize that such things as this, for the United States, and there might deprived of an opportunity to engage in
which has occurred in the case of Yu-. be many nations suing us for implied further activities in that direction.
goslavia, have great significance in con.. . promises made by the State Department. Mr. MANSFIELD. Mr. President, I
nection with this matter and this situa?? Mr. FULBRIGHT. The Senator is go- desire to join the distinguished Senator
tion. ing pretty far afield. I do not think this from Minnesota [Mr. HUMPHREY] and
I do not think this action was taken country does that sort of thing. When the distinguished Senator from Wiscon-
by Yugoslavia in an attempt to infiu?- this country promises to extend credit, it sin [Mr. WILEY] and to particularly call
ence either one way or another the ac?- carries out its promises. That is the attention to two sections in the bill deal-
tion taken by this Congress. big difference between us and Russia. I ing with health. One of these will carry
Mr. MALONE. Mr. President, will the think that has very great significance to forward the malaria eradication pro-
Senator from Arkansas yield to me? the rest of the world. We do business on gram. This section authorizes the use
. Mr. FULBRIGHT. I am very glad to the basis of carrying out promises, and of any funds in the act, other than those
yield. Russia does not. for military assistance and the Develop-
Mr. MALONE. Does the Senator from Mr. MALONE. I point out to the Sen- ment Loan Fund, for this purpose. The
Arkansas have reference to the press re- ator that we promised to build the Aswan administration intends to use $25.6 mil-
ports which came a few days ago in Dam on the Nile River, and then changed lion in special assistance funds for this
regard to the plan of Yugoslavia to sue our minds. program, but it has authority to use
Russia because Russia broke the prom- Mr. FULBRIGHT. That agreement more-or less-if necessary.
ise she had made? was never reduced to the point where The other section invites the World
.Mr. FULBRIGHT. That is a part of credit was extended. Before it got to the Health Organization "to initiate studies
it, The major part in particular refers point of agreement, we changed our looking toward the strengthening of re-
to the fact that the Russians, because minds. The discussion was in the pre- search and related programs against dis-
'they are having an ideological difference liminary stages. I do not want to take eases common to mankind or unique to
with the, Yugsolavs, have postponed for the time of the. Senate to discuss it, but individual regions of the globe." This
5 years, which in effect is 'a with- I should like to point out that what hap- particular provision is really nothing
drawal-the $285 million credit which pened was that the Secretary of State. more than an exhortation, but it is one
they had, with great acclaim, extended. made a proposal. Mr. Nasser did not ac- which I hope will be heeded, because
Mr. MALONE. Where would Yugo- cept the proposal. He made a counter- health strikes me as -an activity espe-
slavia file the suit against Russia for not proposal, in a sense. Negotiations took cially suited to the multilateral ap-
extending the loan it had previously place: Before there was a complete proach. One of the virtues of the
promised to extend? In the World meeting of the minds, the Secretary of malaria eradication program is that it
Court? State withdrew our offer. It never is an international endeavor carried on
Mr. FULBRIGHT. Yugoslavia would reached the point of agreement. in cooperation with WHO and the Pan
have to submit a claim to Russia, as any Mr. MALONE. The Senator from Ar- American Sanitary Organization,
nation submits such a claim, for dam- kansas believes, does he, that the matter Disease transcends political bound-
ages. could never lave been subject to a suit, aries and economic doctrines. There is
Mr. MALONE. I had understood under those circumstances? no ideology in a germ. Certainly this
Yugoolavia was going to sue Russia in Mr. FULBR GHT. No; I do- not think should be a field in which human beings
some court. so. Generally speaking, in this field, can work together simply as human
Mr. FULBRIGIT. I do not know those circumstances would not warrant beings.
about that. The account I referred to a suit. That does not mean the country Another factor pointing to the multi-
was that Yugoslavia would present a could not make a legitimate claim that lateral approach in health is the inter-
claim for damages because Yugoslavia we had injured it. In this general field, national flavor of much of the work that
had expended some $71/2 million in plan- there is no law in the sense that we has already been done. This, I think,
ning for fertilizer plants. Now the have domestic law in the United States, could be capitalized on as international
credit to complete the plants is not under which an aggrieved party can go health work if pushed forward on a more
forthcoming. The extending of the into a court and enforce a contract. organized basis. Would it not be a
loan has been postponed. I think that These are diplomatic relations, which splendid thing, Mr. President, if every
would constitute a legitimate claim for rely upon consent and agreement. vial of penicillin used in these multi-
daniages, in ordinary circumstances, if Mr. MALONE. In 1947, 1948, and 1949, lateral health programs abroad bore the
the credit were withdrawn. the chief argument on the floor was label, "Discovered in the United King-
-Mr. MALONE. If ' rugsolavia ere that the State Department had com- dom and manufactured in the United
to sue Russia for canceling a promised mitted this country, and that it would States"? Or if every X-ray machine
loan and tried to secure damages in be a breach of faith if the Senate did bore the label, "Invented in Germany
the World Court, does the Senator from not appropriate the money. and manufactured in the United
Arkansas believe that might set a prece- Mr. FULBRIGHT. I do not recall that States"? Or if every carton of milk
dent which might apply to us? argument. I do not think I made such supplied by the U. N. Children's Fund
. Mr. FULBRIGHT. Is it the - Sean- an argument. was labeled, "Purified according to a
ator's belief that - Russia has subjected Mr. MALONE. The logical conclusion process developed in France, with ma-
herself to the World Court? Is she would be that such countries would have chinery manufactured in the United
a member of the World Court? a case against us. States"?
Mr. MALONE. If Russia were to 'be Mr. FULBRIGHT. I do not recall such This-would indeed be symbolic of in-
sued by_ Yugoslavia and the World an argument being made in the -sense ternational cooperation and would, I
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'3$4 CONGRESSIONAL. RECORD - SENATE
thin, ,wnave advantageous _psychological In applying this buy American prin-
xlits among the people being aided. ciple, the committee has been quite
'X hope therefore, Mr, Presidents that, in lenient. It would authorize, the Presi-.
'"thee :and. other health krog'rams, the dent to permit up to 50 percent of the
txiinistFation will consider and? take nonmilitary assistance funds (other than
;into account by appropriate regulation the Development Loan Fund) to be used
t? other procedures the?psychological for offshore,procurement. I am inclined
'v lue of emphasizing the prigin of effec to believe that this ceiling on foreign
tive medicine _purchases is set too high. However, in
Mr. ' RMONp. Mr,, President, I view of the fact that the mutual security
a}1i, in sympathy with the principle em program is primarily a security program,
bodied in the amendment 4Galing with and not a program to regulate or restrict
ashore procurement which,the-Coin nit- trade, I am willing to accept the judg-
t'tee on Foreign Relations has offered as ment of the committee as to the percent-
pnQ' of its proposals for improving the age of procurement that can reasonably
inittual security bill. be conducted overseas without undue
principl is thatmditiu- d t Ai idut
e comoes pramageomercannsry.
4ased for the foreign aid program Mr. President. I ask unanimous eon-
in the United States. Tbis a at this point in my remarks, a table pre
tla able principle. By aiding American pared,by?the Office of Statistics and Re-S
.i4atry and agriculture, the purchases ports of the International Cooperation
?
ej*ute io the American economy and Administration, showing the percentage
ce the heavy burden of expense of commodity expenditures which have
nixie y the American taxpayer in sup- been made, under its programs in the
tlrig the Ziutual security, program. United States.
;ICA commodity expenditures, total and principal commodities
o al,prlncipal commodities_
:14lachinery'and equipment
-------------
.9ndste L.-- -- -- _-_---__-
- ------------------
L
e8i gat ---? ----- ..
liizers_. - --- -_
apd r i1 tFarlsportation equipment --
otor vehicles
---------------------
Total ICA commodity
expenditures
Y $1,040
779
10,261
1,805
549
2,084
2,140
179
384
1,635
335
201
183
300
466
%'M?'. THURMOND, Mr. President,, It
Is ,apparent from the table that some
,E4,{lerlcau, 1nous1rles nave oeen gaining
Urger share of the ICA's. procurement
tai? iaf business in the foreign-aid pro-
b1i1 e ,it program, a few years ago, have
been losing ground.
'he most distressing example is that
of the textile industry. In the years
99-5$, a little more than half of the
ACA commodity expenditures for textiles
went to American textile mils. This
'a"s fiery close to the 59-50 arrangement
proposed by the Foreign Relations Coln-
mittee as the ultimate in offshore pro-
eiilement, 'However, the American per-
age cleclii}ed to 24.4 percent in 1956
.nd._7.a percent in .ig57. "In 1957, the
spent $96,000,000 for textile, prod-
cts, of which- only $7 million went to
~me, 4can suppliers.
'be picture improved somewhat,dur-
iig the first 6 months of fiscal 1958,
lien the American} share pf ,textile sales
4or,the foreign assistance program was
Percent of total procured in
United States
As I have pointed out, the immediate
beneficiaries of this amendment will be
the textile-industry, the iron and steel
industry, the chemical industry and the
fertilizer industry. Judging by the.
trend in procurement, it will soon' be
helpful to the machinery and equipment
industry and to the motor vehicle in-
dustry. These industries now get slight-
ly more than half of the procurement
dollar for their classes of commodities,
but have been losing ground.
In the long run, the beneficiaries will
include every American.
Mr. HUMPHREY. Mr. President, I
call up my amendment, identified as
6-3-58-F.
The PRESIDING OFFICER. The
amendment of the Senator from Minne-
sota will be stated.
The CHIEF CLERK. It is proposed, on
page 63, after line 9, to insert:
(d) Add the following new section to the
act:
SEC. 550, It is the sense of the Congress
that the President should explore with other
nations the establishment of an Interna-
tional Food and Raw Materials Reserve under
the auspices of the United Nations and re-
lated international organizations for the
purpose of, acquiring and storing in appro-
priate countries raw or processed farm prod-
ucts and other raw materials, exclusive of
minerals, with a view to their use in-
"(1) preventing extreme price fluctuations
in the international market in these com
modities;
"(2) preventing famine and starvation;
"(3) helping absorb temporary market sur
pluses of farm products and other raw mate'
rials (exclusive of minerals);
"(4) economic and social development pr
95.1
60.2
57.8
grams formulated in cooperation with ott
51.1 appropriate international agencies.
76.0
76.4
36.2
100.0
28.3
100.0-
37. 5
100.0 "Participation by the United States
100.0
100.0
100.0
100. 0
51.4
24. 4
7.5
13.6
90.4
51.2
42.3
41.2
25.8
65.1
44.3
60.7
8.4
1.6
31.1
may be appropriate. The President shall in
35.1
48.8
47.0
44.3 elude in each of the semiannual report8
95.4
75.3
38.6
i
78.2 required by section 584 an account of action':
98.1
741
65.8
87.7
66.5
71.3
68.6 taken under this section."
84. 1
Mr. HUMPHREY. Mr. President, the
hour is very late. I shall take about 30
seconds,
This amendment was offered last year
13.6 percent of the total. Still, this
leaves almost seven-eighths of the busi-
ness for foreign mills.
Foreign producers also supply the
greater share of the iron and steel,
chemicals and fertilizers purchased for
the foreign-aid program.
Mr. President, these are industries
which are vital to the security of the
United States. In case of wartime mo-
bilization,. these are industries which
must expand rapidly to supply the needs
of the Armed Forces, and to supply ur-
gent needs at home. Any security pro-
gram which works to the detriment of
these industries Is a dangerous security
program.
The amendment of the distinguished
Senator from Maine [Mr. PAYNE], who is
himself a member of the Foreign Rela-
tions Committee, permits a maximum of
50 percent of any class of commodity to
be procured overseas when, in the judg-
ment of the President, such procurement
will not unduly damage the domestic
industry,
to the mutual-security bill then pend-
ing and was adopted by the Senate. It
Is a direction to the President of the
United States in our negotiations as a
member of the United Nations.
The purpose of this amendment has
received considerable international sup-
port. I 'cite for the RECORD that the
present Prime Minister of Canada, Mr.
Diefenbaker, has recently supported an
international food and fiber reserve.
I also note that the Japanese Gov-
ernment, the Italian Government, the
Costa Rican Government, and other gov-
ernments have indicated interest in the
discussion of such a policy.
Finally, whatever may be decided, if
anything should be accomplished in line
with the purpose of the amendment it.
would have to be submitted to the Sen-
ate in accordance with the language,1
which says "statutory authorization or
treaty approval, as may be appropriate."
Mr. HICKENLOOPER. Mr. Presi-
dent, the amendment was offered in the'
Senate Committee on Foreign Relations,,i
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1958 CONGRESSIONAL RECORD - SENATE '9385
The amendment was rejected as imprac- lation and authorization (Public Law 480) unselfish and genuine good will shall for-
tical at this time. ' surplus agricultural commodities for the ever be recorded in the annals of history as a
The administration opposes-the amend- establishment of reserve stocks to meet ex- glowing tribute to the American people and
reasons. I shall not, traordinary needs due to crop failure or other as irrefutable evidence of our sincere devo-
ment for various emergencies, to mitigate excessive local fiuc- tion to the cause of peace and human well-
take the time to state the reasons this tuations of prices, or to meet unforeseen in- being.
evening, because of the lateness of the creases in demand. Today the foreign aid program has been
hour. The fact is the amendment has (e) Such assistance in the establishment diverted from its original task of helping a
been considered and rejected by the of reserve stocks is contingent upon adequate sick and war-weary world regain its strength.
+eken to assure that ennt'mercial It is now lending its resources to the eleva-
. ,h _ ..
te
s bein
s
p
g
tion of peoples throughout the world who
11 n
e
"
` "
the amendment be rejected at this time. ?'a`N ` "?
The principle involved is being pur- storage facilities are available, and that a
number of other reasonable conditions are
sued now mainly on the basis of the met.
individual nation's capability of such
stockpile. This amendment would es- The PRESIDING OFFICER. The
tablish another international agency, question is on agreeing to- the amend-
and we know what that would mean. ment offered by the Senator from Minne-
Mr. President, I ask unanii'ious con- sota [Mr. HUMPHREY]. [Putting the,
sent to have a statement printed in the question.]
RECORD at this point, in connection with Mr. DOUGLAS. Mr. President, I ask
this matter. for a division.
There being no objection, the state- On a division, the amendment was
ment was ordered to be printed in the rejected.
RECORD, as follows: - The PRESIDING OFFICER. The
INTERNATIONAL FOOD AND RAW MATERIALS question is on agreeing to the committee
??... A---+ ne o,,,n?AoA
t
(d) The United States is prepared to make the suffering peoples of war- orn na ons.
available within the limits of existing legis= it is my personal conviction that this act of modifications by the distinguished members
(a) The creation of International food re- The vital significance of the foreign aid armies and we supply their bases. Without
-
serves
to program has been duly recognized by all these men and bases the world over, our
create the present many time
probleisms not with feasible. regard It
would establishment location, etablisof storage facilities, Americans. The Nation as a whole has con- future would indeed be jeopardized. They
administration, and' financin tributed billions of dollars and thousands of are an indispensable part of our own defense
g' its administrative specialists and technicians and, in turn, the defense of the entire free
(b) The creation of national food reserves to make the program succeed and enjoy con- world.
to serve any of a number of different pur- structive results. The Congress has year Thus the foreign-aid program, in addition
poses appears to be both desirable and after year undertaken bipartisan efforts to to the valuable-assistance it renders to the
feasible. achieve sound legislation affecting foreign underdeveloped nations of the world, also
(c) The United States Government is con- paid and guiding the program according to the contributes immeasurably to our own ideo-
~sulting with governments'of both importing best interests of the Nation. And the ad- logical and military defense. For this reason
land exporting countries through FAO's Con- ministration has actively supported foreign I speak today in its support and hope that It
?sultative Subcommittee on Surplus Disposal aid and, given it the leadership which it de- Will be allowed to continue its valuable
and its Working Party on National Reserves serves. Following the chaos of World War II services.
ytth a view to facilitating realization of pro- the program was born from the realistic rec- Before concluding, however, I wish to make
grams of this kind. However, no concrete ognition of all Americans that it was their a few brief remarks concerning an amend-
proposals have been developed yet. responsibility and moral obligation to assist merit to the Mutual Security Act which I
ti introduced and which has been adopted with
Senator HuMPHREY has proposed an L11c ula;caauaaacaav, wa wa?aw?. ., ., w++
amendment which would add a new section agreect to.
550 to the act expressing the sense of the The PRESIDING OFFICER. The
Congress that the President should explore question is on the engrossment of the
with other nations the establishment of an amendment and the third reading of the
international food and raw materials reserve. bill.
EXECUTIVE BRANCH POSITION The amendment was ordered to be en-
Tbe executive branch opposes the Senate grossed, and the bill to be read a third
amendment for these reasons; time.e bill was
1. The possibility of establishment of an read the third time.
international food reserve has already been Th Mr. bill was . Mr. President, I ask
explored with other nations. Such explora-
tion has taken place in the Food and Agri- unanimous consent to have printed in
culture Organization of the United Nations the RECORD a statement I have prepared
the Economic and Social Council of the with respect to the extension of the
United Nations, and the General Assembly of mutual-security program.
the United Nations. At the 11th session of There being no objection, the state-
the United General
SlAssembly pointed in out that November 1 there e6, were the ment was ordered to be printed in the
United States
slight prospects of action on world reserves, RECORD, as follows:
but much better prospects for national food STATEMENT RY SENATOR PAYNE ON EXTENSION
reserves, in t1-e~ creation of which the United OF MUTUAL SECURITY PROGRAM
States was w111ing to assist. The General Once again the Senate of the United States
Assembly then adopted Resolution 1025, has before it a bill to extend the Mutual
based largely on a United States draft, which Security Act and to authorize the necessary
requested the Secretary General, in prepara- appropriations. Few measures which come
tion of a report requested by an ECOSOC before the Congress of the United States
resolution, to include an analysis of the each year are of greater significance to the
desirability and possibility of promoting na- destiny of our own Nation and all the peo-
tional reserves which might meet emergency ples of the free world. Few bills call for
situations, prevent excessive-price increases more responsible action on the part of those
resulting from failure of local food supplies, of us who have been honored by our elector-
and prevent excessive price increases result- from ate to sit here as their representatives in
development increased demand dueao economic this great Chamber. The Mutual Security
-development programs. The FAO O sec re- - Act is indeed a cornerstone upon which the
tariat is currently preparing, by agreement structure of free world cooperation and de-
presentation the staff of the the eet for fense is based. More than that, it is a prac-
of E OS to this coming g summer r session tical and applied symbol of those most noble
oY the . qualities and characteristics of the American
2. The sue subst bstance of the United States pool- people-social responsibility, generosity, co-
tton, which is understood by other members operative endeavor, and unqualified devotion
or the United Nations and of the Food and to peace and the elevation of human dignity
Agriculture Organization, is as follows: and well-being
No. 91-12
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for centuries have lived under conditions of
poverty, disease, and malnutrition. It is also
contributing to the defense of these nations,
many of which have only recently joined the
World Community as independent and sover-
eign states. In so doing, the foreign aid pro-
gram is rendering a service of inestimable
value to underdeveloped and new-born na-
tions throughout the world. But we must
not for a moment forget that it-is also con-
tributing untold benefits to our own in-
terests. There is no doubt in my own mind
that all Americans want to help the less
fortunate peoples of the world. We are a
prosperous Nation. We enjoy the highest
standard of living ever achieved by a society.
We are also naturally motivated by an un-
selfish response to assist those in need. For
this reason, we genuinely desire to share our
prosperity with those who are now making
every effort to emerge from want, illiteracy,
and disease, and who desire, to take their
rightful places among the more developed
nations of the world. On the other hand,
no nation can be expected to give of itself
tirelessly without reward. To expect this of a
nation is not only unrealistic but also un-
wise. Any program such as foreign aid must,
therefore, be in tune with the principles of
enlightened self-interest. For this reason,
we must never underestimate the contribu-
tions the program makes to the United States
itself as well as to our many foreign friends.
In a world divided into two conflicting
Ideological camps, each finding it necessary
for its own self-preservation that its way of
life be understood and acknowledged by all,
it is imperative that the United States dem-
onstrate its traditional motivations toward
peace and human welfare. It is vital that we
make known to all our heritage of social re-
sponsibility and cooperative endeavor. Even
in an era of International harmony we would
seek to aid the unfortunate peoples of the
world. In a period of cold war, however,
when our very basic political, social, and
economic institutions are challenged, such as-
sistance becomes ever more necessary as a
means of establishing stability in nations
which might otherwise succumb to the false
promises of communism, and as a means of
making clear and evident our peaceful inten-
tions and the advantages of our way of life.
This the foreign-aid program provides.
In addition it contributes to the coopera-
tive defense efforts of the free world. It
permits less prosperous nations to have the
arms necessary for their own protection
against the constant menaces of the Krem-
-lin. These nations provide the men and the
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9386 CONGRESSIONAL RECORD - SENATE
pf, the Committee on Foreign Relations. This, in my estimation, is a detrimental from Texas [Mr. YARBOROUGH), are ab-
This amendment would modify the procure- policy especially at a time of economic slump- sent on official business.
merit policies of the foreign-aid program by here at home. It represents the use of Amer- Mr. DIRKSEN. I announce that the
requiring that at least 50 percent of each ican, tax dollars to help put Americans out
commodity purchased under chapter 3 of of work. Senator from Wyoming [Mr. BARRETT],
title I, and also under title III and title IV The supporters of this policy tell us that the Senator from New York [Mr. IVES),
of the Mutual Security Act be bought here they are saving American tax dollars by buy- the Senator from Pennsylvania [Mr.
in the United States and that the other 50 ing commodities overseas where they are MARTIN], and the Senator from Kansas
percent of each commodity also be purchased cheaper and where the dollar, therefore, can [Mr. SCHOEPPEL] are absent on official
domestically if the President determines that be stretched. I am quite certain that were business.
such procurement will be of advantage to this situation thoroughly analyzed, we would The Senator from New Hampshire
the United States economy with special ref- find that the unemployment and industrial
'ereneato areas of labor surplus. I wish to inactivity resulting from the loss of these [Mr. COTTON], the Senator from West
emphasize, Mr. President, that it is the inten- foreign aid contracts are much more costly Virginia [Mr. REVERCOMB], and the Sen-
tion of the author of this amendment that to the American people than would be the ator from Massachusetts [Mr. SALTON-
50 or more percent of each commodity be case If our tax dollars were spent here at STALL] are necessarily absent.
purchased in the United States. Recent in- home where .admittedly they could not buy The Senator from Ohio [Mr. BRICKER],
terpretations of this amendment by officials quite as much as they can in countries with the Senator from Vermont [Mr. PLAN-
of the Department of State have suggested low standards of living and where labor en- DERS], and the Senator from Michigan
that the executive branch construes it to joys none of.the benefits provided to Ameri- -, _. .
ment funds be spent here at home. This is inactivity mean great losses in personal and business.
not at all what was intended,by the author corporate income taxes. Furthermore, the The Senator from Maryland [Mr. BUT-
of the. amendment, nor is it consistent with money paid in unemployment compensation LER], the Senator from West Virginia
the language of the amendment. For this also represents a considerable drain on tax [Mr. HOBLITZELL], and the Senator from
reason I wish to again repeat that the amend- dollars. The loss of jobs here at home re- Nebraska [Mr. HRUSKA] are also absent
went as introduced is intended to require sulting from the loss of millions of dollars on official business.
that at least 50 percent of each commodity worth of foreign aid contracts is certainly The PRESIDING OFFICER. A that under the designated titles of ity not a saving to the American taxpayer whose
quo-
purchased ' Mutual Security Act be bought domestically dollars, as I say, are helping toputhim out rum is present.
and that even more than 50 percent of a of work. The question is, Shall the bill pass?
commodity be purchased in the United States For these reasons I did introduce this On this question the yeas and nays have
unless the President can show that off-shore amendment which modifies our present been ordered, and the clerk will call the
purchases would not adversely. effect the foreign aid procurement policies and pro- roll.
economy of wthe ould erith special hibits this unwise purchase of foreign com- - The Chief Clerk proceeded to call the
enoy of
areas of labor States
or upon modities when our own industries are suf- roll
reference eindustrial areas o mobilization base. surplus
So far the fering from unemployment. The amend-
the was adopted by the Committee on Mr. EASTLAND (when his name was
Department of State interpretations have not Foreign Relations and is included in the called). On this vote I have a pair with
been correct and I emphasize the intention of bill we are now considering. A more reason- the junior Senator from Rhode Island
my amendment in order that the Department able ? procurement policy ill not only be [Mr. PASTORE]. If he were and
on by ex. ottbespam fitted to write legislative history beneficial to the American taxpayer, the voting he would vote "yea." If It were
n
American worker, and numerous American at liberty to vote I would vote "nay." I my s a It is ndment (sincere conviction that thla industries, but it should also strengthen the therefore withhold my vote.
vitally needed in order foreign aid program itself by blunting the
make theapplication of the Mutual Security edge of criticism aimed against it and by Mr. MAGNUSON (when his name was
Act more reasonable and in line with our na- cementing public opinion in support of it. called). On this vote I have a pair with
tional self interest. I first became aware of the senior Senator from Oklahoma [Mr.
the unwise procurement policies of the In- Mr. JOHNSON of Texas. Mr. Presi- KERR]. If he were present and voting
ternational Cooperation Agency, which pres- dent, I suggest the absence of a quorum. he would vote "nay." If I were at liberty
ently administers foreign in aprogram, recent The PRESIDING OFFICER. The to vote I would vote "yea." I therefore
and of its predecessor agencies clerk will call the roll.
study I made of the textile industry. I withhold my vote.
learned, for example, that since 1949 Amer- The Chief Clerk called the roll, and Mr. MANSFIELD (when his name was
ican tax dollars have purchased over $356 the following Senators answered to their called). On this vote khave a pair with
million worth of textiles under the foreign names: the Senator from Louisiana [Mr. LONG].
aid program. Of that amount $240,820,000 Aiken Fulbright McClellan If he were present and voting he would
worth were purchased overseas and $115,190,- Allott Goldwater McNamara
000 worth were bought here at home. Yet, Anderson Gore Monroney vote "nay," If I were at liberty to vote
as we all know, the domestic textile industry Bennett Hayden Morten I would vote "yea." I therefore with-
is in a very serious plight and has been since Bible Hennings Mundt hold my vote.
the war. Mills'-have been closing by the Bridges. Hickenlooper Neuberger Mr. McCLELLAN (when his name was
score and there are now several hundred Bush Hill Payne called). On this vote I have a pair with
thousand fewer textile jobs than there were Carlson t Humphrey Proxmire the senior Senator from Florida [Mr.
in 1947. Yet, ICA has been buying the lions Jackson Purtell
share of its textiles overseas. In fiscal 1957 Carroll Javits Russell HOLLAND]. I understand that if he were
alone, of the $96,322,000 worth of textiles Case, N. J. Jenner Smathers present and voting he would vote "yea."
Case
purchased with foreign aid funds $89,111,000 GRr,avez Dak. Jordan Johnson, Tex. Smith, Smith, N. J. Maine If I were at liberty to vote I would vote
d
worth were bought overseas and only $7,211,- Church Kefauver Sparkman "nay." I therefore withhold my vote.
000 worth were purchased here, at home. Clark Kennedy Stennis The roilcall was concluded.
Had this purchasing policy been reversed, I Cooper Knowland Symington
am certain that several textile mills which Curtis Kuchei Talmadge Mr. MANSFIELD. I announce that
er
closed during the year might still Dirksen ge M
T r. Mopen Douglas Lausche Thhyemond the Senators from Virginia LMr. m
and that the jobs of several thousand textile Dworshak Magnuson Watkins and Mr. ROBERTSON], the Senator from
Workers might have been saved. Eastland Malone Wiley Delaware [Mr. FREARI, the Senator from
'And this unwise procurement policy has Ellender Mansfield Williams Florida [Mr. HOLLAND], the Senator from
affected other industries suffering from un- Ervin Martin, Iowa Young
employment. In textile machinery, for ex- South Carolina [Mr. JOHNSTON], the
ample, ICA in fiscal 1957 purchased $5,433,- Mr. MANSFIELD. I announce shift Senator from Oklahoma [Mr. KERR], the
000 worth. Of that total $4,264,000 worth the Senators from Virginia [Mr. BYRD Senator from Louisiana [Mr. LONG], the
were bought overseas and only $1,169,000 and Mr. ROBERTSON], the Senator from Senator from Montana [Mr. MURRAY],
worth came from American Industry. Yet Delaware [Mr. FREAR], the Senator from the Senator from Wyoming [Mr.
in Biddeford-Saco, Maine, the Saco-Lowell Florida [Mr. HOLLAND], the Senator from O'MAHONEY], the Senator from Rhode
Shops, probably the world's largest producer South Carolina [Mr. JOHNSTON], the Island [Mr. PASTORE], and the Senator
of textile machinery, were working at 50 Senator from Oklahoma [Mr. KERR], the from Texas [Mr. YARBOROUGH] are ab-
percent capacity with additional layoffs fore- Senator from Louisiana [Mr. LONG], the sent on official business.
cast. I understand that in the procurement senator from Montana CMr. MURRAY], present motor vehicles, footware, and many other I further announce that if resent and
commodities the policy has been the same, the Senator from Wyoming [Mr. voting, the Senators from Virginia [Mr,
With foreign c
m
tit
O'M
-
o
pe
ors obtaining the lions
AHONEY],
the- Senator from Rhode BYRD and Mr. ROBERTSON], the Senator
share of American foreign aid contracts. Island [Mr. PASTORE], and the Senator from South Carolina [Mr. JOHNSTON],
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93$7
and the Senator from Wyoming [Mr. NOT VOTING-28 Foreign Relations Committee today, on
O'MAHONEY], would each vote "nay." Barrett Hruska O'Mahoney the subject of the basic goals of United
On this vote, the Senator from Della- Bricker Ives Pastore States foreign .policy.
ware [Mr. FREAR] is paired with the Sen- Butler Johnston, S. C. Potter
Byrd Kerr Revercomb There being no objection, the state-
ator from Montana Mr. MURRAY]. If Cotton Long Robertson ment was ordered to be printed in the
present and voting, the Senator from Eastland Magnuson Saltonstall RECORD, as follows:
"nay" Flanders Mansfield Schoeppel
Delaware would vote nay' and the Frear Martin, Pa. Yarborough STATEMENT BY THE HONORABLE JOHN FOSTER
Senator from Montana would vote "yea." Hoblitzell McClellan DULLES, SECRETARY OF STATE, BEFORE THE
Mr. DIRKSEN. I announce that the Holland Murray SENATE FOREIGN RELATIONS CQMMITTEE
-Senator from Wyoming [Mr. BARRETT], So the bill (H. R, 12181) was passed. Mr. Chairman, my associates in charge of
the Senator from New York [Mr. IVES], Mr. MANSFIELD. Mr. President, I regional and economic affairs have made de-
the Senator from Pennsylvania [Mr. move that the vote by which the bill was tailed expositions of United States foreign
MARTINI, and the Senator from Kansas passed be reconsidered. policy in relation to particular subjects. I
shall present the basic philosophy, the
[Mr. SCHOEPPELI are absent on official Mr. JOHNSON of Texas. Mr. Presi- rationale, which underlies those policies.
business. dent, I move to lay that motion on the
1. OUR BASIC GOALS
The Senator from New H ,mpsh:ire table. United States foreign policy is designed
[Mr. COTTON], the Senator from West The motion to reconsider was laid on to protect and promote the interests of the
Virginia [Mr. REVERCOMB], and the Sen- the table. 'United States in the international field. It
STALL], are necessarily absent.
The Senator from Ohio [Mr. BRICKER],
the Senator from Vermont [Mr. FLAN-
DERS], and the Senator from Michigan
[Mr. POTTER], are detained. on official
business.
The Senator from Maryland [Mr. BUT-
LER], the Senator from West Virginia
[Mr. HOBLITZELL], and the Senator from
Nebraska [Mr. HRUSKA] are also absent
If present and voting, the Senator from
Maryland [Mr. BUT ER9, the Senator
from West Virginia [Mr. HOBLITZELL],
the Senator from New York CMr. IvEs],
and the Senator from Massachusetts
vote "yea," and the Senator from Kansas
would vote "nay."
The Senator ftbm West Virginia [Mr.
REVERCOMB], is paired with the Senator
from Nebraska [Mr. HRUSKA]. `If present
'and voting, the Senator from West Vir-
ginia would vote "yea," and the Senator
from Nebraska would vote "nay."
The result was announced-yeas 51,
:nays 17, as follows:
YEAS-51
'Carroll
Case, N. J.
Case, S. Dak.
ILLEGIB Church
Clark
Cooper
Dirksen
.Douglas
'Bible
Chavez
:Curtis
Dwgrshak
Ellender
Ervin
Javits
Johnson, Tex.
Kefauver
Kennedy
Knowland
Kuchel
Lausche
Martin, Iowa
NAYS-17
Goldwater
Jenner
Jordan,
Langer
Malone
Russell
that the Senate insist on its amendments (a) That the peoples of the world univer-
to House bill 12181, request a confer- sally desire the elimination of war and the
ence with the, House. of RepresentatNes establishment of a just peace;
(b) That the desi
ns of a
re
i
C
g
gg
ss
ve
om-
thereon, and that the Chair appoint the munist imperialism pose a continuous threat
conferees on the part of the Senate. to every nation of the free world, including
world, with this Na ion a powerful partner
Mr.,SMITH of New Jersey, CMr. HICKEN- .committed to this p pose;
LOOPER, and Mr. KNOWLAND conferees on (d) That change i the law of life, for
men, and that no
cial system survives
to pay high tribute- to the
chairman of the Foreign
floor manage
and who has
mittee, who has been the
for the bill just passed,
nd nights working
been passed, af-
en, by an over-
whelming vote. I belied
tribute to the industry
oparxman
Symington
Thye
B
Watkins
Wiley
Stennis
Talmadge
Thurmond
Williams
Young
A HILOSOPHY AND RATIO
EIGN POLICY
Mr. KNOWLAND. Mr. President, I
ask unanimous consent that there be
printed in the body of the RECORD a
statement by Hon. John Foster Dulles,
"Secretary of State, before the Senate
will ever be
y act of the
our foreign policy would safegl and and pro-
elusive; rather they are overlappi'hg and in-
terdependent. Yet, of them, ideals rank
first.
Our people have never hesitated 'to sacri-
fice life, property; and economic well-being
in order that our. ideals should not, perish
from the earth.
So we often have a narrow path to tread.
We must avoid war and still stand both firm
and affirmative for what we deem to be just
and right.
Success in our purposes requires that we
have vision to see, hearts to understand, and
minds to resolve, the problems of the world
.in which we live.
N. THE CHALLENGE OF CHANGE
We face the challenge of change. Long-
.established political relationships are evap-
orating; massive fresh human aspirations
demand new responses; physical limitations
-within and without this globe are being
.swept away by the advances of science.
1. We are witnessing a political revolu-
Ion that is drastic and worldwide in its
preominant in the world through a politi-
cal s tem known as colonialism, backed by
ire- erant industrial and military power.
That litical system is now in process of
rapid tra formation. Within the last 15
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Kansas [Mr. SCHOEPPEL]. If present and The PRESIDING OFFICER. With-
voting, the Senator from Michigan would out objeyction, it is so ordered.
free wort , of
ember, it con-
ent and voting, the Senator from Wyo- Mr. JOHNSON of Texas. Mr. P _esi-
which the United States is a
ming would vote "nay," and the Senator dent, I ask unanimous consent that when siders all nations. including
The Senator from Wyoming [Mr. BAR- their purpose and ability
-RFTT1. is nnired with the Sena.tnr from ORDER FOR ADJOURNMENT TILL 11 independence;
McNamara
Monroney
Morse
Morton
Mundt
Neuberger
Payne
Proxmire
Purtell
Smathers
Smith. Maine
[Mr. SALTONSTALL], would each vote objection, it is so ordered. pl( rnic Jadvancement _1P .-
(Mr.
Aiken Fulbright
Allott Gore
Anderson Green
'Beall Hayden
Bennett Hennings
Bridges Hickenlooper
Bush Hill
Capehart Humphrey
Carlson Jackson
195$ < . CONGRESSIONAL RECORD - SENATE
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9388 CONGRESSIONAL RECORD -SENATE June b
years 700 million people of 20 countries have
won political Independence. This trend will
contlntt~.
But stability Is not achieved and a new
order comfortably established merely by the
grant of political independence. That is
but the beginning of a two-phased struggle.
? To preserve political independence re-
quires a people who themselves exercise self-
restraint and who acquire education. With-
out these qualities, political independence
may mean but a brief transition from be-
nevolent colonialism to ruthless dictator-
ship.
Tfie second front is the economic front.
The grant of independence has generated
'ass aspirations, which have spread conta-
giously to all who, having been bogged down
for centuries in a morass of abject poverty,
demand a prospect for rising In the eco-
rtomic scale.
Thus, we face 'a world new both in terms
of its political structure and its economic
demands.
2. We face another new world in terms
of physical power. The splitting of the atom
revealed sources of power, so vast, so omni-
present, as to imply a new industrial revo-
lution. Also it changes the very nature of
wax, in that general war now would menace
the very existence of human life upon this
planet.
3. A third new world opens in terms of
outer space. Throughout history, until now,
man has assumed that the atmosphere put
a limit on man's reach. Now his satellites
and, missiles go far beyond. Soon they will
be carrying human beings far beyond. Just
what this means we do not,know. We sense
but dimly what we realize mustbe new pos-
sibilities of infinite purport.
4. Even on this globe, old areas take on
new aspects. What were barriers of forbid-
ding cold and ice now, in the North, offer
the routes whereby many can most quickly
establish contact with each other. And in
the South, Antarctica, probed by the Geo-
physical Year, reveals a new and exciting
possibility of service to mankind.
5. And peace must be better assured within
the society of nations.
Today no international wars are being
fought. For that we can be thankful. But
our peace is a precarious peace. It depends
too much on individual and national re-
straints, upon accurate calculations, and
upon avoidance of miscalculations and mis-
chances. It is not sufficiently rooted In a
system of law, order and justice.
Unless we build a better international
order, all of the new prospects which beckon
Iniiankind forward and upward will come to
the naught of a blackout that has no ending.
III. THE GOALS OF INTERNATIONAL COMMUNISM
These challenges of a changing world are
the more demanding of us because Inter-
national communism seeks to doi Inate the
change and thereby itself ride to world rule.
It professes a creed which, it claims, shows
the way to assured peace and great produc-
tivity. According to it, human beings are
animated particles of matter; order and
Maximum productivity require that they be
directed in accordance with a master plan
which will assure conformity of thought and
act, and eliminate the discords inherent in
a society which gives freedom of thought and
choice to the individual human being. The
Soviet Communist Party, as the general
.staff of the world proletariat would devise
and administer the worldwide master plan.
International communism emphasizes sci-
ence and scientific applications. It seeks to
dominate the world with a military estab-
lishment so powerful that its will will not
be challenged. It strives for superiority in
all material ways, including economic pro-
cluctivity. It makes intensive efforts in the
new fields of nuclear energy, and in the
exploration of outer space.
Thus, the challenge of.change that con-
fronts us offers not a choice between free-
dom and stagnation, or even between free-
dom and chaos. The choice is between
freedom and a world in which great power,
strong discipline, and a materialistic creed
are, combined to end everywhere the exer-
cise of human freedom..
IV. OUR RESPONSE TO THE CHALLENGE OF
CHANGE
The United States responds to the chal-
lenge of change. As an equal among equals,
and in willing partnership with others, we
play a positive and creative. part. We do
so not merely as a counter to Communist
imperialism. We do so because to play such
a part is natural to us and comports with
our great tradition. We do so In no parti-
san mood, but with policies that reflect solid
bipartisan cooperation.
The independence movement
1. On September 8, 1954, at Manila, acting
under the inspiration of President Maysay-
sa?y, the United States and other Western
powers joined with free Asian nations to
proclaim the Pacific Charter. The signa-
tories declared:
"They uphold the principle of equal rights
and self-determination of peoples and they
will earnestly strive by every peaceful means
to promote self-government and to secure
the independence of all countries whose
peoples desire it and are able to undertake
We take every propriate occasion to as-
We encourage eduaq,onai exchanges and
We provide technical a tance, both bi-
laterally and through the Vi4ted Nations.
The leaders of the new countries are not
blind to the danger to independence that
stems from international communism. They
seek to find, in freedom, the way to solve
their countries' problems. They look to the
Atoms for peace
2. The United States pioneers in the world
of the atom. Our first concern is that this
incredibly great force shall not be used for
human destruction.
In 1946, when atomic power was still our
monopoly, we sought, through the Baruch
plan, such international control as would
assure that atomic power would never be an
instrument of war. The Soviet Union re-
jected that proposal. We nevertheless con-
tinue our efforts. President Eisenhower's
"atoms for peace" proposal, made to the
United Nations in 1953, finally led to positive
results, which should grow with time.
The International Atomic Energy Agency
was established in1957 with a present mem-
bership of 66 nations, including the U. S. S. R.
But that Government still fails to join to
implement that vital part of the President's
proposal which would have drawn down
nuclear war stocks for peace stocks under
International control.
We continue to press the Soviet Union in
that respect.
We continue to develop and to spread the
peaceful uses of atomic energy.
We have made bilateral arrangements with
39 nations and have supplied research re-
actors to 16 nations. Negotiations are under
way with others.
We are developing close and constructive
relations with Euratom the atomic agency
of six Western European nations.
President Eisenhower expressed, in 1953, to
the United Nations our determination "to
find the way by which the miraculous inven-
tiveness of man shall not be dedicated to his
death, but consecrated to his life."
We are doing much to assure that the new
world of power which is developing will, in
fact, serve that noble purpose.
Outer space for peace
3. We also give leadership in planning for
the use of the new world of outer space. I
recall President Eisenhower's letter of Janu-
ary 13, 1958, to Mr. Bulganin, where he said:
"I now make, Mr. Chairman, a proposal to
solve what I consider to be the most im-
portant problem which faces the world today.
"I propose that we agree that outer space
should be used only for peaceful purposes.
We face a decisive moment in history in re-
lation to this matter."
So far the Soviet- reply has been evasive.
But we feel confident that our viewpoint will
prevail, if for no other reason than that the
Soviet Union will finally see its own welfare
In that result.
Meanwhile we plan our civilian space
agency, legislation for which is now before
the Congress. It will help us devise and im-
plement programs for the peaceful use of
outer space.
The polar areas
4. In Antarctica, we have actively partici-
pated in the scientific studies of the Geo-
physical Year. We have become deeply im-
pressed with the danger if that unfolding
continent should become a scene of inter-
national rivalry and if its physical possi-
bilities were to be used to threaten world
peace and security. So, the United States
has proposed that a conference be held to
negotiate a treaty guaranteeing peaceful
use of Antarctica and continued interna-
tional scientific cooperation there. We in-
vited 11 countries which had heretofore
shown particular Interest in Antarctica, in-
cluding the Soviet Union. All of them have
replied favorably.
a
0, pear
gan.'l
Mr.
It 't
"the air
gions is th
or 8r
U. S. S. R. an
is therefore an port:
which has special s ific
with the availability L
That fact makes It tI!
that these new routes of
threats leading to new fears, netrarmaments,
and more preparedness.
We recently proposed to the United Na-
tions Security Council to initiate in this area
President Eisenhower's open skies proposal.
We were supported by all of the members
of the Council except tht Soviet Union. We
shall persist to assure that the new world of
the Arctic shall be impressed into the service
of peace, not of war. Our concept is so
sound and just, and so much in the interest
of all mankind, that we expect the Soviets
to come to accept it, as they already accept
the principle of reserving Antarctica for
peace.
The organization of peace
5. Our most intensive efforts are those de-
signed to create a world where peace is
stably ensconsed.
(a) The United Nations is, of course, a
primary reliance, and it has well served the
cause of peace. Through the collective ac-
tion of its members, aggression in Korea
was repelled. Through the United Nations,
peace was restored in the Middle East.
We strive in all possible ways to invig-
orate the processes of the United Nations
and have, under difficult circumstances,
shown our loyalty to its principles. There
are, however, built-in limitations.
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