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were present and voting he would vote Arizona would vote "yea,” and the Sen- Unfortunately, the distinguished "yea"; if I were permitted to vote, I ator from Kentucky would vote “nay." senior Senator from Oregon [Mr. MORSE] would vote "nay." I therefore withhold On this vote, the Senator from Nebras- had to leave the floor briefly, to attend a my vote.

ka (Mr. HRUSKA] is paired with the Sen- very important conference on the higher The rollcall was concluded.

ator from Kentucky [Mr. COOPER). If education bill. He will return later and Mr. HUMPHREY. I announce that present and voting, the Senator from Ne- will have a speech to make. the Senator from New Mexico [Mr. An- braska would vote "yea," and the Sen- I do not know of any votes which will DERSON), the Senator from Alaska [Mr. ator from Kentucky would vote “nay." be taken during the remainder of today. BARTLETT], the Senator from Indiana On this vote, the Senator from New It is anticipated by the leadership [Mr. BAYH], the Senator from Nevada Mexico (Mr. MECHEM] is paired with the that next week the Senate will meet on [Mr. BIBLE], the Senator from Mississip- Senator from Iowa [Mr. MILLER). If Monday, Tuesday, Wednesday, Thurspi [Mr. EASTLAND), the Senator from present and voting, the Senator from day, and Friday; and it may be that Indiana (Mr. HARTKE), the Senator from New Mexico would vote "yea,” and the votes will be taken on any or all of those Washington (Mr. JACKSON), the Senator Senator from Iowa would vote “nay.” days. I mention Tuesday specifically, from Louisiana (Mr. LONG], the Senator On this vote, the Senator from Penn- because although some elections will be from Arkansas [Mr. MCCLELLAN), the sylvania [Mr. Scott] is paired with the held on that day, there is no commitment Senator from Wyoming [Mr. McGEE], Senator from Utah (Mr. Moss). If pres- that votes will not be taken in the Senate the Senator from Montana [Mr. MET- ent and voting, the Senator from Penn- on that day. In view of the fact that CALF], the Senator from Utah [Mr. sylvania would vote “yea,” and the Sen- we may be in for a long siege, I think it Moss), the Senator from. Florida [Mr. ator from Utah would vote “nay." well to inform Senators that the Senate SMATHERS], the Senator from Mississippi The result was announced-yeas 29, will meet on Tuesday of next week, as [Mr. STENNIS], and the Senator from nays 46, as follows:

well as Monday, Wednesday, Thursday, Texas [Mr, YARBOROUGH) are absent on

[No. 202 Leg.]

and Friday, and that on Tuesday, votes official business.


may be taken in the Senate. I further announce that the Senator

Mr. JOHNSTON obtained the floor. Bennett Gruening Russell from California [Mr. ENGLE] is absent Byrd, Va. Johnston Simpson

Mr. MANSFIELD. Mr. President, will due to illness.


Jordan, N.C. Symington the Senator from South Carolina yield I further announce that, if present and

Jordan, Idaho Talmadge

briefly to me?

McGovern Thurmond voting, the Senator from California (Mr. Cotton Morse


Mr. JOHNSTON. I yield.
ENGLE], the Senator from Montana [Mr. Curtis


Mr. MANSFIELD. Mr. President, I METCALF], and the Senator from Florida Ellender Nelson

Williams, Del.

understand that the distinguished Sena

Ribicoff [Mr. SMATHERS] would each vote “nay." Gore

Young, Ohio

tor from South Carolina has an amendOn this vote, the Senator from Alaska

ment to the amendments which are

NAYS-46 [Mr. BARTLETT) is paired with the Sena

pending and are at the desk. I call his Aiken tor from Nevada [Mr. BIBLE). If pres

Hickenlooper Monroney

attention to the fact that, in response Allott Hill

Muskie ent and voting, the Senator from Boggs


Neuberger to a question raised by the distinguished Alaska would vote "nay," and the Sen- Brewster Humphrey Pastore

minority leader, I stated that no other ator from Nevada would vote "yea."



votes would be taken this afternoon. So On this vote, the Senator from Indiana

Keating Prouty

I hope that with that in mind, the Sena[Mr. BAYH] is paired with the Senator Dirksen Kennedy Proxmire

tor from South Carolina will agree with

Kuchel from Mississippi [Mr. EASTLAND). If Dodd


the leadership and will join in the assurDominick Lausche Saltonstall present and voting, the Senator from Douglas Long, Mo. Smith

ance that no other votes will be taken Indiana would vote "nay,” and the Sen- Edmondson Magnuson Sparkman this afternoon. ator from Mississippi would vote "yea.”

Mansfield Williams, N.J.

Mr. JOHNSTON. I assure the maFulbright McCarthy Young, N. Dak. On this vote, the Senator from Indiana Hart


jority leader that I shall not call for [Mr. HARTKE) is paired with the Senator Hayden McNamara

any vote on any amendment. from Washington (Mr. JACKSON). If


Mr. MANSFIELD. I thank the Senpresent and voting, the Senator from Anderson Goldwater Miller

ator from South Carolina. Indiana would vote “nay," and the Sen. Bartlett Hartke

Morton ator from Washington would vote "yea.” Bayh



On this vote, the Senator from Wyo-


Long, La. Smathers ming (Mr. McGEE] is paired with the Byrd, W. Va. McClellan Stennis

Mr. MANSFIELD. Mr. President, I Senator from Louisiana (Mr. LONG]. If Cooper


Yarborough ask unanimous consent that when the

Eastland Mechem present and voting, the Senator from


Senate concludes its session today, it Wyoming would vote "nay," and the

take a recess until noon, on Monday Senator from Louisiana would vote

So Mr. MORSE'S motion to recommit

next. "yea.” was rejected.

The PRESIDING OFFICER (Mr. On this vote, the Senator from Utah

Mr. FULBRIGHT. Mr. President, I

BREWSTER in the chair). Without ob[Mr. Moss) is paired with the Senator move that the vote by which the motion

jection, it is so ordered. from Pennsylvania (Mr. Scott]. If pre- was rejected be reconsidered. sent and voting, the Senator from Mr. DIRKSEN. Mr. President, I move

KAINO HELY AUZIS Utah would vote “nay,” and the Senator to lay on the table the motion to reconfrom Pennsylvania would vote "yea." sider.

Mr. HUMPHREY. Mr. President, I Mr. KUCHEL. I announce that the

The motion to lay on the table was

ask that the Chair lay before the Senate Senator from Maryland (Mr. BEALL], agreed to.

the amendments of the House of Reprethat the Senators from Kentucky [Mr.

sentatives to Senate bill 310, for the reCOOPER and Mr. MORTON], the Senator

lief of Kaino Hely Auzis.


The PRESIDING OFFICER laid beator from Nebraska [Mr. HRUSKA), the Mr. DIRKSEN. Mr. President, I fore the Senate the amendments of the Senator from New Mexico (Mr. MECHEM), should like to ask the distinguished ma- House of Representatives to the bill (S. the Senator from Iowa [Mr. MILLER) and jority leader about the schedule and 310) for the relief of Kaino Hely Auzis, the Senator from Pennsylvania [Mr. what he anticipates for the remainder of which were, in line 3, strike out "sections SCOTT) are necessarily absent.

this afternoon and about as much of the 101(a) (27) (A)” and insert "sections 203 The pair of the Senator from Mary- schedule for next week as he can state (a) (2)", and in line 6, strike out "minor land [Mr. BEALL) has been previously at this time.

child” and insert "daughter". announced.

Mr. MANSFIELD. Mr. President, it is Mr. HUMPHREY. Mr. President, on On this vote, the Senator from Arizona my understanding that the distinguished April 4, 1963, the Senate passed S. 310, to [Mr. GOLDWATER) is paired with the Sen- Senator from South Carolina (Mr. JOHN- provide for the granting of nonquota ator from Kentucky [Mr. MORTON). If STON] has an hour's speech on the for- status to the adopted daughter of citipresent and voting, the Senator from eign aid proposal.

zens of the United States.

On July 9, 1963, the House of Repre- solution to approaching disaster con- away programs be stopped now. I only sentatives passed s. 310, with amend- sists of more and more billions to be regret that the President did not, on the ments to grant second preference status wasted in foreign aid-more billions to basis of the Clay report, do more than to the beneficiary.

be thrown on top of the billions already make a modest cut of $420 million in Inasmuch as a quota number will be spent into the cesspool of hopeless con

spent into the cesspool of hopeless con- his request for foreign aid funds for the currently available for the beneficiary, fusion.

coming fiscal year. But he still asks for I move that the Senate concur in the There is nothing new about foreign another $412 billion in foreign aid. May House amendments to S. 310.

aid. In one form or another, it has been the good Lord have mercy on us and The PRESIDING OFFICER. The given for thousands of years. The na- our economy. question is on agreeing to the motion of tions of the world throughout the pages But perhaps I expect too much too the Senator from Minnesota.

of history have engaged in aiding each soon of a committee appointed by the The motion was agreed to.

other. The ancient Greeks tried to meet executive branch of Government. In the challenge of the Persians, the Mace- any case, these 10 points made by the

donians, and finally the Romans with Clay Committee were of special interest AMENDMENT OF FOREIGN ASSIST- programs of mutual assistance. The Ro

to me: ANCE ACT OF 1961

mans paid handsome subsidies, from 1. External aid is of little value unless it The Senate resumed the consideration time to time, to both their allies and is accompanied by an internal expression of

their satellites. Great Britain, almost of the bill (H.R. 7885) to amend further

will and discipline. singlehanded, bore the financial burden the Foreign Assistance Act of 1961, as

2. We are attempting too much for too

many. amended, and for other purposes. of the last and eventually successful

3. We should not extend aid which is inMr. HOLLAND. Mr. President, I have coalition against Napoleon.

consistent with our beliefs, democratic traat the desk an amendment to the pend

No, there is nothing new about foreign dition, and knowledge of economic organizaing amendments which have been offered aid as a concept and as a practice. The tion and consequences.

4. We believe the United States should not by the distinguished majority leader only thing new about foreign aid is the [Mr. MANSFIELD], on behalf of himself reckless abandon with which the United aid a foreign government in projects estaband other Senators. I ask that my States of America has pursued its pro- lishing Government-owned industries and

commercial enterprises which compete with amendment to those amendments be grams.

existing private endeavors. called up and be made the pending ques- tions have pursued foreign aid programs

Over the years of history other na

5. Foreign aid was not designed for combat tion.

zones. Consideration should be given for The PRESIDING FFICER. The

The with a specific purpose in mind and making provision for countries in the border amendment of the Senator from Florida with a specific goal in view. But we areas other than in our foreign aid program. to the

6. We do not see how external assistance so-called Mansfield-Dirksen Americans seem to have another ideaamendments will be stated. or perhaps the lack of an idea. We

can be granted to Indonesia by free world

countries unless it puts its internal house The LEGISLATIVE CLERK. On page 1, in seem to believe that if we pursue re

in order, provides fair treatment to foreign line 8, of the amendments (No. 280) sub- lentlessly a program of abstract to

creditors and enterprises, and refrains from mitted by Mr. MANSFIELD, on behalf of getherness and humanitarianism, we will

international adventures. himself and other Senators, the follow- find at the end of some distant rainbow 7. We cannot accept the view that the ing amendment (No. 290) is proposed: that brave new world which we have United States must provide aid lest the namely, strike out the figure “$1,500,- sought and failed to achieve, through fragile, new, developing countries of Africa

accept it from Communist nations with re000,000” and insert the figure $975,- two World Wars and the Korean war. 000,000”.

Historically, other nations have ex

sulting political penetration and eventual

subversion. The PRESIDING OFFICER. The tended foreign aid for two reasons: first,

8. We believe that the United States has question is on agreeing to the Holland to strengthen their military position in contributed proportionately more than its amendment to the so-called Mansfield- concrete terms; and second, to develop share to the task assumed by the United NaDirksen amendments.

their colonies or territories or other areas tions in the Congo. Mr. JOHNSTON. Mr. President, I for the ultimate benefit not only of the 9. The United States and Latin America believe that we have reached a crucial colony or protected state but also for cannot allow another Castroite-Communist

Cuba to come into existence. point-perhaps the most crucial point in the benefit of the motherland itself. We the history of U.S. foreign policy. When Americans, however, have gone radically sustaining foreign assistance

to the lessany nation, most particularly a great na

developed countries is falling unfairly on the tion which carries the heavy responsibil- limited objectives. We Americans aid United States, and that the industrialized ity of leadership for much of the world, everybody who asks for it, and even some countries can and should do more than they is determined to preserve its identity and who do not. We aid our allies. We aid are now doing. independence before the onslaught of so-called neutral states which consist

One would think, also, that sooner or Communist degradation and imperial- ently vote against us in the United Na

later, at least a part of the truth would ism, it cannot afford the luxury of fan- tions and oppose us elsewhere. We even

catch up with even those who practice tastic waste. aid the satellites and vassals of the Com

political and economic self-hypnosis. Mr. President, it is my considered munist enemy.

The Clay Committee shows some indicaopinion that it is mind-changing time

I call attention to the "Report to the

tion of achieving at least a slight glimin the Senate of the United States. For President of the United States From the

mer of an understanding of the political 17 years since World War II we have committee To Strengthen the Security

and economic facts of life. But apparconstantly and consistently accepted the of the Free World on the Scope and

ently the truth has no meaning for these magic formulas of the apostles of give- Distribution of U.S. Military and Eco

other people who are prisoners in the away foreign aid. This we must stop. nomic Assistance Programs.” This is decadent, crumbling castle of ideas of I am not one of those people who reck- the so-called Clay Committee report on

their own making. They suffer from one lessly charge those with opposing points foreign aid, dated March 20, 1963.

grotesque hallucination piled on top of of view with dishonesty, deceit, or a lack

Every American interested in the for

one act of stupidity after another. No! of integrity. Let us give the apostles of eign relations of his country and in world Fiscal sanity and the economic facts of giveaway the benefit of the doubt. Let peace should read the Clay report. The international life continue to escape and us say in all sincerity that they believe majority view of the report contains elude the apostles of giveaway. in their magic formulas. Like most hu- more clear thinking than any of the re- Instead, they try to readjust the man beings, the persons whom they have ports on the same general subject which facts or at least to confuse themselves deceived most are themselves. There have come out of the executive branch about the facts—by indulging in namecan be no doubt that these supposedly of Government under the three admin- changing and alphabet soup for aid prosane, intelligent, and loyal Americans istrations since World War II.

grams and agencies. We can only hope have gotten us into a quicksand of mess I can only conclude, however, that that the Clay Committee report will reand predicament in foreign entangle- it is a terrible pity that General Clay sult in more insight and real thinking ments from which we may never dis- and his committee did not carry their about foreign aid. engage ourselves. The great tragedy of thoughts to a logical conclusion and We have had economic aid which we it all is that their only recommended thus recommend that foreign aid give- called lend-lease. That was during World War II, and I think a review of to determine how much of this aid is Fourth. Foreign aid, they say, will the settlement agreements would show military and how much is economic. create stable societies friendly to the that there was not too much lend, very There is just too much change and too West. little lease, and an awful lot of give- much fuzzy thinking in the labels and Fifth. Foreign aid, they say, will proaway. Since World War II we have had categories assigned to different types of vide for hungry nations to buy surplus mutual security programs. But these programs for anyone to be very sure of U.S. commodities. mutual security programs by name defy himself on this subject.

Sixth. Foreign aid, they say, will enall logic. Not only is mutual security aid The agencies which have administered

courage the flow of capital, both public extended to allies but it is extended also foreign aid have changed names even

and private, essential to the longrun to neutrals and to the vassals of the Com- faster than the names of aid programs success of economic development. munist enemy. How can these programs have been changed-in fact, as fast as a

Seventh. Foreign aid, they say, will be either mutual or add to our security? lizard can change skins. As I recall,

act as a stabilizer against recession in Then there has been technical assist- we started out with the Marshall plan

the United States, a crutch for our forance designed to provide the know-how being administered by a task force with

eign trade and thus, by implication, as a to those who do not possess our indus- in the State Department. For a time,

subsidy and a pump-priming device for trial and technical skills. A close exami- even after the bulk of economic assistnation of the technical assistance pro

American economic expansion and full ance was transferred to a separate agen

employment. gram will, however, show that money is cy, the Technical Cooperation Adminis

Eighth. Foreign aid, they say, will spent not only on personnel possessing tration was part of the State Departskills but also on goods and miscellane- ment. Later, however, TCA became part ment. Later, however, TCA became part abroad and through subsidized visits of

offer in the persons of Americans living ous services. and parcel of the Mutual Security Ad

foreign officials to the United States, a Then, there are loans. These loans, ministration which then administered

living example of democracy—that is, so many of them, are really gifts in that foreign aid. there is no hope of ever recovering them. As for the alphabet soup, the foreign

"democracy by example," to use the

fashionable cliche. The Development Loan Fund, which was aid agency has been known as ECA,

First. Let us take the idea that forput into operation several years ago, tac- MSA, FOA, ICA, and now AID. Which itly acknowledges this state of affairs by stand for, respectively, Economic Coop

eign aid enhances our defense and employing the category of "soft loans.” eration Administration, Mutual Security

strengthens our military might. What are soft loans? Soft loans are Administration, Foreign Operations Ad

Historically, and on the basis of pracloans that no practical banker or busi- ministration, International Cooperation

tical horsesense, a case could be made nessman would touch with a 10-foot Administration, and now Agency for In

for real defense support, as contrasted

with vast quantities of giveaway ecopole. Soft loans are gifts that it is more ternational Development. politic to call loans.

One might say that, regardless of the

nomic assistance, to our NATO allies in

Europe as well as to our allies in the Finally, there is the interesting cate- name, this particular rose smells all the gory of defense support, which one would same. The smell is that of giveaway

Southeast Asia Treaty Organization, think includes the instruments and wea- leading to national bankruptcy and eco

SEATO—the Central Treaty Organizanomic chaos. pons for possible war. But defense sup

tion–CENTO—the Republic of China, port includes not only weapons and ma- Perhaps the most interesting name of

Vietnam, the Philippines, and perhaps teriel but substantial amounts of eco

a few other nations. all was Foreign Operations Administranomic aid. Indeed, at one time all eco- tion which was the Eisenhower admin

But there are other countries in which nomic aid was called defense support aid. istration's first choice of giveaway agen

economic aid cannot possibly be justiWe started out, after World War II, cy names. At least, FOA gave the wags fied under the pretext of defense supwith the Greek-Turkish Aid Act. At that around Washington a chance for a lit- port because in those nations the time there was great pressure by the tle expression of humor. tle expression of humor. For it was said

United States is not helping to support Russians on Greece and Turkey. In the that FOA, pronounced "Fo-ah," was en

the military forces to any significant

degree. In those nations economic aid case of both countries we went from tirely fitting for a Capital City which military assistance to permanent pro- at that time showed a strong affinity for is called special assistance and under

the game of golf. grams of economic dole.

this category we are asked to provide Then, there was the Marshall plan. We But let us go to great lengths to be

additional millions to Afghanistan, Bowere told, in 1947, by Mr. Paul Hoffman fair about this matter,

fair about this matter. Without being livia, Burma, Ethiopia, Ghana, Haiti, and by Representative Christian Her- guilty of creating straw men to be

guilty of creating straw men to be Indonesia, Jordan, Liberia, Libya, Moter_later Secretary of State under the knocked down, and with full intent to

rocco, Nepal, Somalia, Sudan, Tunisia, second Eisenhower administration, do justice to those who believe in eco

Yugoslavia, and others. nomic aid, let us ask ourselves: On what

Let us take that in 4 years the total expenditure on

a few examples of

the recipients of special assistance. aid to Europe in its recovery would not premises do they base their beliefs? Let

Through fiscal year 1962 we gave apexceed $17 billion. Actually, I believe, us, indeed, ask ourselves what kind of

proximately $3,953 million to India. that aid under the Marshall plan only rationale has been used to stampede the amounted to about $12 billion. departure of all our billions of foreign India, supposedly, was a nation dedi

cated to nonviolence and peaceful purBut foreign aid becomes a habit, and economic aid-billions which amount to

suits. Yet India's record is a mixed one. we have gone on and on, looking for almost three-fourths of our national

debt. new areas to aid, on the theory that since

She has attacked our NATO ally, Portu

gal, and defied the U.N. Charter in doing 1947 there are harsh new forces at work

The national debt is more than $300

so, but she also resisted Red Chinese in the world which endanger this Re- billion, and almost three-fourths of it

aggression. public and its people. According to the has been caused by the foreign aid latest reliable figures I have on hand, giveaway program. It costs us approxi

Ghana, an African State, was promised

vast new amounts of aid for its sweepby the end of fiscal year 1962 our total mately $6 billion a year in interest alone. aid amounts to $97,675 million since Now then, what are the arguments for

ing Volta River project. Yet Ghana's

brand of neutralism is that of repeatedly World War II, on top of $4914 billion foreign economic aid? spent on lend lease.

Insofar as I can determine, the argu

voting against our position in the U.N.

not abstaining but voting against us reThat makes approximately $147 bil- ments are based on these basic concepts: lion. Bear in mind that is not all. Re- First. Foreign aid, they say, enhances

peatedly. Ghana, moreover, has emmember, we had to borrow the money our national defense and strengthens

barked upon a program of left-leaning to pay 3 percent interest. Ever since our military might.

dictatorship and authoritarianism. 1950 we have been paying more than $3

Second. Foreign aid, they say, will Even among those nations to which billion annually on the additional stop communism in its tracks by creat- we are allied there has been incalculable amount of indebtedness caused by our ing conditions of social and economic waste which could have only weakened aid to foreign countries. At the present well-being from which the opposition to not only our defense position but theirs. time it amounts to almost $6 billion an- communism will arise.

In Iran, for example, we spent $3 milnually in interest alone-additional in- Third. Foreign aid, they say, will pro- lion to build a road to a proposed dam terest created on account of foreign aid. vide for programs of economic growth site before there was even a firm conIn the final analysis, it is impossible on a planned businesslike basis.

tract for financing the dam.

In Laos, to whom we have given about a factory site, the determination of the type not meet the burden of rapid economic $445 million in aid, there has been, ac- of equipment to be used, and the scale of development, and the whole problem culcording to one Government operations operations and the prices to be paid for ma

minated several years ago in the overcommittee report, case after case of con

chinery and materials are left to the manflicts of interest, apparent mismanage

agement of the enterprise. If the judgment throw by a military junta of the constiment, misuse of funds, and even in

of the management proves to be wrong on tutionally established Government of

these matters, the management loses its in Turkey. stances of what I would call graft. vestment.

As that great educator of Yale UniThe list of error and miscalculation In Korea, where many industries are gov- versity, William Graham Sumner, put and outright stupidity is indeed almost ernment owned and where many others are it many years ago: endless. And for further details I refer, financed almost entirely by government

State ways do not make folkways. Senators, to the address I made in 1961 loans, the normal profit and loss incentives before the Senate on this same unhappy and penalties cannot be accepted as adequate Too often, our apostles of giveaway subject. So let us proceed in our clinical and time-consuming machinery of bureau

controls of management, and the elaborate have failed to take into consideration the examination of the ideas which foster cratic review has to be relied on.

mores and customs of a developing sogiveaway by the billions and over decades.

ciety. Too often, they have overestimat

There are undoubtedly a considerable Second. Foreign aid is supposed to stop number of entrepreneurs with the manage

ed the absorption power of an economy communism in its tracks by creating the ment ability and with capital, and the sur

for foreign aid. Too often, foreign aid social and economic conditions from vey team visited a number of factories has brought not stability and economic which the opposition to communism will equipped by the United States which are in plenty but instability and economic arise. We gave, through fiscal year 1962, successful operation. These successes appear chaos. Too often, modern technology approximately $2,400 million to Commu

to reflect the adequacy of the entrepreneurs has been superimposed on regimes and nist Yugoslavia, and approximately cedures for granting U.S. assistance.

rather than the effectivenss of the pro- administrative systems which were un$52212 million to Communist Poland.

able to cope with Western instruments of

Recognizing that its observations were We even gave approximately $50 million limited, the survey team, nevertheless, invites

progress. to Cuba before the rise of that bearded consideration of the possibility that U.S.

Fourth. Foreign aid, they say will crebeatnik Napoleon, Fidel Castro, and then assistance to the industrial-commercial seg

ate stable societies friendly to the West. another $2 million after Castro came to ments of the economy (as distinguished from This idea is so closely related to the power. How much opposition to com- public utility segments—such as railways previous one that it has been for the munism has arisen in Poland? Did our

and powerplants) should be limited to en- most part answered. Let me just sugaid restrain Castro from declaring him- terprises where there is a qualified manager

gest, however, that stability is generated self a Communist and leading his people then most of the surveying, screening, and with adequate equity capital available and

from within a society. And friendship to totalitarianism and bringing us to the reviewing procedures now in effect elimi

can no more be purchased among nations very brink of war last fall? Just how nated.

than it can be among individuals. Perindependent, in the final showdown, will A corollary of this would be that to the

haps William Shakespeare put it best Tito's Yugoslavia be of Khrushchev's So- extent that local entrepreneurs are not avail- when he said: viet Russia

able to carry forward industrial-commercial Neither a borrower nor a lender be, for Third. Foreign aid, they say, will pro- development on an adequate scale, encour- loan oft loses both itself and friend. vide for programs of economic growth agement should be given to foreign firms to

come in and fill the deficiency. If the Koon a planned businesslike basis, a totally

In our own country Ralph Waldo Emridiculous theory proven baseless by sad services of foreign entrepreneurs, it should

rean Government is unwilling to use the erson wrote along the same lines: experience.

We do not quite forgive a giver. The hand accept the fact that certain areas of eco- that feeds us in some danger of being bitten. May I call attention, also, to the fact nomic development must await the indigethat in Pakistan one of the auditing nous production of management ability and

Fifth. Foreign aid, they say, will enteams observed that 10 dump trucks, risk capital.

able hungry nations to buy surplus U.S. procured at a cost of $265,000, were standing idle while the earthmoving

How well-planned and businesslike is commodities. Under existing law, we

may dispose of farm surpluses abroad by work has performed by women with head for which the existing managerial abili

a program which gives birth to projects selling them for foreign currencies, makbaskets and burros. The dump trucks, ties and other skills are most inade

ing grants for disaster and famine relief, it was discovered, were not suited to the quate-in fact, so inadequate that the

and donation to private welfare organi,

zations for oversea distribution. ficult to train operators of complex equip projects grind to a halt?

I do not find fault with giving farm ment, and labor was abundant, so women to whom we had extended approximate, fault with some of the techniques used. Another case in point is that of Turkey surpluses

to hungry people, but I do find were used instead of the expensive dump ly $4 billion in total aid through fiscal trucks which our tax dollars had pur

Why should we collect foreign curchased. year 1962. It is reported that our aid

rency for agricultural surpluses and then Still another example of the planned, to Turkey has met with tremendous suc

spend these funds on the country's develbusinesslike basis of foreign economic cess. Indeed, one document states that

opment program? Why do we not make aid programs can be found in the case there was a 50-percent increase in Tur

a greater effort to swap more of our agriof Korea. In the report of the staff sur- key's gross national product between 1948 cultural surpluses for the products in very team of the Subcommittee for Re- and 1962, 144-percent increase in the which we are in such short supply-for view of the Mutual Security Program on number of industrial establishments, 61- example, manganese, chromite, cobalt, Economic Assistance to Korea, Thailand, percent increase in industrial production, and tungsten, and so forth? Even given and Iran, dated July 5, 1960, attention is 52-percent increase in mineral produc- the facts that some of the hungry nacalled to five projects which are described tion, 95-percent increase in generating tions do not produce these scarce comas being “bogged down." This interest

This interest- capital for electric power, and more than modities, could me not join with other ing quotation, found on pages 6 and 7 of 100-percent increase in agricultural pro- surplus food producing areas and arthis report should provide further refutaduction.

range three-way barters of products? tion of this third concept:

Yet, despite all of these impressive And even if we do now have huge stockNATURE OF PROBLEM

figures and despite the constantly repeat- piles of many scarce commodities, surely These stalled projects cannot be gotten

ed statement that Turkey's great leader, these commodities could be imported for back on the track

merely by putting up more Attaturk, had carried his country so far day to day use in the United States. money. Korea suffers from an acute short

that it was ripe for an economic aid pro- Sixth. Foreign aid, they say, will inage of capital, but there are indications of gram, and despite the fact that Turkey crease the flow of capital, both public an even more acute shortage of entrepre- has been able to maintain an impressive and private, essential to the long-run neurs-that is, men able and willing to as- armed force against Communist aggres- success of economic development. sume top management responsibility and at sion, our hopes have not been fulfilled This concept is based, of course, on the same time risk a substantial amount of

in that valiant country. For years, infla- the fairly widely held view among modtheir own money in backing up their judg- tion has been rampant, there has been a ment.

ern economists that an underdeveloped In the United States, as in the other na

flight of capital from the country, and and agricultural economy will reach a tions of the world where industry and com- there has been an unfavorable balance so-called takeoff point. That is, the merce are highly developed, the choice of of trade. To put it simply, Turkey could economy must produce a surplus over and beyond its needs in order that say. True, our exports do exceed our im- True, British production had expanded ings may be available for investment. ports, and this imbalance could not con- during those 20 years. But absolutes are The percentage of savings necessary for tinue indefinitely. If a nation sells, it never important in international ecothe economy's takeoff toward indus- must also buy.

nomics or politics. The awful truth is trialization is variously estimated at 5 to But with foreign aid, we are running a that Great Britain's competitors had ex15 percent of the gross national product. deficit in our balance of payments, and panded with modern technology at a far

In the Western World during the in- we had been losing gold at a rapid rate greater rate than had the British. dustrial revolution, particularly in the until the Kennedy administration was Ironically, it was British capital which 19th century, savings for investment were able to institute measures of control. had built up the competition offered to accumulated by capitalists through the In 1947 we had almost $23 billion in gold her in the 1880's and thereafter by the mechanism of maintaining low wages stocks and in 1963 we were left with less United States, Germany, and Japan-all and thus controlling the consumption of than $16 billion. Most of the gold out- newcomers among the great nations on the working people—who otherwise flow has occurred since 1957.

the international scene. Yes, the British would have eaten up and used up all of And why has there been a gold flow out capitalists allowed their own industries the savings.

of the country in recent years? The an- to become obsolete and antiquated while In the Soviet world, modernization and swer is both complex and simple. It is they enjoyed large profits from oversea industrialization advanced at a much that our exports are less than the com- investments. The net result was that faster rate than in the West—the Soviets bined totals of imports, essential mili- Britain was no longer able to play her not only kept wages low but also con- tary aid to our allies, expenditures by traditional role as the balancer in trolled prices, and deliberately main- American tourists abroad, and give the European balance-of-power system. tained scarcities of consumer goods as away foreign aid.

And once the scramble for colonies was well as millions of slave laborers.

No. Even ignoring other factors, for- over, Germany decided to challenge Taking the underdeveloped nations as eign aid is an undependable crutch. For British power. a group, it would seem that those Amer- foreign aid contributes in more ways The peril point and escape clauses icans who expect miracles from foreign than one to our balance-of-payments and all the trade agreements in the aid ignore many facts of life. First of problems.

world will not help us if we preside over all, we have seen what happens when There is no doubt in my mind that our own economic disaster. Nikita foreign aid is poured into nations with- foreign aid channels American produc- Khrushchev has invited us to compete out modern administrative institutions- tion into temporary and unstable pur- with the Communist world and has nations whose people are tied to beliefs suits. More important, perhaps, it does promised the United States that he would that fitted simple societies but not mod- the same thing abroad to foreign indus- wbury us.” Nikolai Lenin is said to have ern industrial societies. It frequently re- tries. It builds up with American money made this statement: sults in a runaway inflation, reckless competition from foreign industries who

The time will come when they (the capiconsumption, an excess of imports-in- have the production costs' advantage of

talist nations) are so bankrupt that they cluding luxury imports-over exports low wages—advantages which can be will lose all power of resistance. and wholesale corruption.

magnified through the introduction of Somehow, those who have the savings modern assembly line techniques. The

It may be, as some eminent authorities are afraid to remove them from the sock disaster brought to the textile industry have maintained, that Lenin was referor the cookie jar. And to keep the ball in my own State of South Carolina and ring only to moral rather than to finanrolling—to meet the so-called revolution in many other States is only one example cial bankruptcy. But I doubt it. Comof rising expectations—the apostles of of this fact of life.

munism, in theory and in practice, is giveaway must continually find new American industries, not wanting to tied to materialism. Thus, I should think sources of funds—either American, Brit- preside over their own destruction, are that Lenin meant both financial and ish, or from international organizations. investing more and more money abroad. moral bankruptcy. In any case, financial

More and more, also, we find the re- In 1939 there were $11,400 million in bankruptcy frequently precedes moral cipients of foreign aid inclined toward American long-term capital invested bankruptcy—or at least the two go hand

in hand. authoritarian methods to solve the in- abroad. By 1947, this figure had grown creasingly complex problems of their to $16,900 million in private capital and

Let us not contribute to our own downown making. Castro has embarked on $12,200 million in U.S. Government in- fall by reckless giveaway programs. Let wholesale nationalization and heavy- vestments. And by 1961, this figure had us not aid Khrushchev in burying us. handed controls. Nasser of Egypt and increased to $48,927 million in private Let us not prove that a ruthless ComNkrumah of Ghana have apparently be investments and $21,814 million in U.S. munist, Nikolai Lenin, was right. haved in a similar, although perhaps Government investments—a total of al- Eighth. Foreign aid, it is said, will, in more moderate vein. The list of foreign most $70 billion invested abroad. the persons of Americans living abroad aid sired or nourished tyrants is almost The free flow of capital is just fine and through subsidizing visits of foreign endless.

in theory until one examines the stark officials to the United States, provide a It is said, however, that Tito of Yugo- realities of tariffs, customs regulations, living example of democracy, that is, slavia has relaxed in his frenzy of dic- currency controls, and differences in democracy by example, to use the fashtatorship and nationalization since be- wages for labor that does not move freely ionable cliche. coming a major recipient of the Ameri- across national boundaries.

According to the last account I had, can dole. - But this is somewhat like the An excessive flow of capital can, in we, the United States, had about 15,000 man who cut his throat so he would not other words, spell disaster in this world people engaged in the foreign aid prohave to shoot himself. For Tito had of controlled domestic economies.

gram. All of these people, of course, do gone so far down the path of dictator- Perhaps we should learn a lesson from not live abroad. But I wonder how many ship and nationalization that any relax- Great Britain of the 19th century. For of them, even with the best will in the ation, whether it is spelled out in a new Great Britain emerged from the Napole- world, can really offer democracy by constitution or not, is purely relative- onic Wars as the most powerful and in- example in societies ruled by absolute and probably will be temporary as well. dustrially-advanced nation on earth monarchs, medieval despots, and auSeventh. Foreign aid, they say, will the workshop of the world.

thoritarian socialists-regimes which are act as a stabilizer against recession in the

Contrary to popular belief, it was not so frequently riddled with corruption. United States, a crutch for our trade, World War I that put Great Britain on And we note that Americans living and thus, by implication-a pump-prim- the economic skids. World War I only abroad are subjected to wholesale criting device for American economic ex- expedited a process that had long been icism for high living in the minds of pansion and full employment.

in progress. I am told that in 1860 those less fortunate than ourselves— It is perfectly true that no nation can Great Britain produced two-thirds of all particularly the intellectuals who cannot live indefinitely in economic plenty while the coal and steel—the very lifeblood of hope to attain the American standard the rest of the world starves. But I economic strength in the 19th century of living. To them, the oversea Ameridoubt that it is wise for us, in this era which flowed in international trade. - By can more and more comes to resemble of international tension and fantastic 1880, Great Britain was producing only the European colonizers who have deexpenditures for defense, to lean upon one-third of the coal and steel that parted so recently. Surely the tempers the weak reed of foreign aid. flowed in international trade.

of these Americans must be frayed and

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