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[From Metalworking News, Oct. 7, 1963] CZECH EFFORT TO MODERNIZE SEEN STALLED (By Bernard Leason)

PRAGUE.-Plans for modernization and expansion of basic sectors of the Czechoslovak metalworking industry-particularly the well-subsidized machine tool branch-have reportedly been stalled or postponed 1 to 3 years because of foreign currency shortages. During a recent tour of Czechoslovak foundry installations and a visit to the Brno International Trade Fair, a Metalworking News correspondent was told of hopes to buy new automatic foundry equipment for moldmaking from Britain or Japan and of the pressing need to divert resources to the task of reequipping the country's own machine tool producing plants.

Considered very indicative of the present situation is quiet but earnest talk among Czechs in the industry about the possibility of obtaining Western licenses in fields where development costs are especially high. It is believed this could include complex electronic gear for factory automation and such new Western developments as high energy rate forming.

Equipment in most Czech factories of the favored machine tool industry averages 13 years old; most of it was installed during a retooling drive lasting from 1946 until the Communist seizure of power in 1948. Other less favored factories are believed to be equipped with prewar tools.

FULL CIRCLE

In the eyes of knowledgeable Western observers, Czechoslovakia's metalworking industry has come full circle.

Emphasis since 1948 on full production to support a politically inspired export drive of almost total proportions, and an accompanying regime refusal to cut production for the sake of continuing modernization, research, and development has now resulted in an investment bind of major importance.

It is felt the situation has matured in the midst of other, more general, economic troubles and that the Czechoslovak situation is probably reflected to a greater or lesser degree in other strongly industrial Soviet bloc states.

Defective production throughout the economy cost the country about $500 million in 1962, according to the regime's own complaints. Prague acknowledged that Rumanian protests about badly produced equipment were correct, and it has been reported that whole shipments of Skoda cars have been returned to South American importers.

SORRY PICTURE

The country's own consumers are rebelling against badly made or tastelessly finished products.

The minister of metallurgical industry and ore mining, V. Supka, in an August interview with the Czech trade union newspaper Prace presented this picture:

In July, not a single foundry achieved its planned production.

Almost all blast furnaces had a high incidence of breakdowns "due to deterioration prior to major repairs."

Production of raw steel was 3.4 percent short of the plan, and rolled material was 4.1 percent under the plan in July.

In the opinion of observers of the Sovietbloc economic scene Czech efforts to do a quick repair job on past bad relations with the United States, to settle American commercial claims against Czechoslovakia, and to increase United States-Czech trade stem from the economic situation.

For West European machine tool producers, a gradual respite from Czechoslovak low pricing and long-term credit policies in machine tool sales is expected. Sources in Prague maintain the country can no longer support large subsidies for the industry and that it must begin paying its own way, par

ticularly if large new investments are now made for modernization and expansion.

It is also ventured that the industrial situation in Czechoslovakia, Poland, East Germany, and Hungary is probably worse than has been generally recognized in the West, and that this will become more evident during the winter of 1963-64, which is expected to be a tough one.

MUST TURN TO WEST

Prague's planners find themselves in the position where they must deal with Western producers of sophisticated automatic equipment if the metalworking sector is to receive the doctoring it needs.

The transfer line for processing motor blocks in the 2-year-overdue Skoda plant at Mlada Boleslaw, outside Prague, is reportedly being supplied by a French group; the electronically guided overhead conveyorsupply system for carrying bodies and blocks will be British.

Czechoslovak plants seen by Westerners in September exhibited an almost total absence of automatic machinery.

Behind talk of modernization and licensing, and the noticeable improvement of United States-Czechoslovak relations, lie several facts of great importance.

The year 1962 was the worst year economically for the Czech Communists since they took power in 1948. A drop in labor productivity from 1961 to 1962 was on the order of 10 percent. Production increases in the past have come mainly from increases in the labor force. But reserve labor is now largely exhausted.

[From the New Leader, Oct. 28, 1963] RUSSIA'S CONTINUING CRISIS

(By Richard Judy)

On September 3, 1953, Nikita Khrushchev went before the central committee of the Communist Party of the Soviet Union to sound the tocsin: Agriculture was in crisis. A decade of Khrushchevian husbandry has passed, and Soviet agriculture remains in crisis.

The immediate crisis of 1963 is acute. A long and viciously cold winter killed many crops before they could sprout; the summer was hot and dry in many parts of the country, causing widespread drought. The grain harvest this year may have been the worst in the past 10 years.

The poor harvest apparently caught the Soviets with grain reserves that were insufficient to tide them over until next year. Bread shortages were reported as early as midsummer. Both the state and the party issued appeals to the population to exercise great care in the use of grain and bread. Cafeterias ceased to serve free bread with their meals, and severe penalties were dealt out to profit-seeking individuals who took advantage of artificially low state prices to buy bread for fattening livestock.

Crop failure and negligible reserves placed the Soviet leadership in great difficulty. A harvest upon which the nation could subsist in 1953 was grossly inadequate in 1963: The population had grown by 37 million mouths. Importation of food became an immediate necessity. Russian orders for vast quantities of flour went out to brokers in Western Europe and colossal wheat purchases were contracted from Australia and Canada. A quantity of grain was "borrowed" from Rumania and negotiations are now underway in Washington which may lead to large sales of American wheat.

The size of the Soviet grain imports is enormous, with the total cost expected to exceed $1 billion. Indications are that the Russians feel great urgency for immediate delivery. Everything testifies to the acuteness of the present food crisis in the U.S.S.R.: The expenditure of such quantities of gold and foreign exchange is unprecedented in Soviet history.

The apparent absence of grain reserves raises serious questions about Soviet agricultural performance in recent years. Western calculations indicate that if Soviet harvests since 1953 had been as high as officially reported, there should have been very ample reserves to meet the contingency of this year's crop failure. A possible explanation is that official harvest reports for recent years may have been greatly exaggerated. Experts in the U.S. Department of Agriculture have suspected an increasing degree of exaggeration in these harvest data for at least the past 6 years.

It may me that the falsification has occurred at the lowest level-that Soviet farmers responded to high-level pressure for larger harvests by inflating their reports. If this is true, then top Soviet officials have been misled and have only discovered in the past few months that the graneries were emptier than they had assumed. In any case it is now very difficult to accord the official data much credence, for the harvests for recent years may have been as much as 30 percent below official claims.

In broader perspective, the present acute grain shortage is but an aggravated instance of a chronic agricultural crisis. The Stalinist strategy of economic development gave agriculture, along with other consumer-related sectors, a very low priority. Stalin's main interests in agriculture were to squash any potential political opposition from the peasants and to extract as much farm produce as cheaply as possible for export and urban consumption. At the time of his death in 1953, Soviet agriculture had not yet recovered from the twin traumata of collectivization and wartime destruction.

The sequel to Khrushchev's oratory at the September 1953 plenum was an immediate and dramatic rise in agriculture's priority. State purchase prices of farm goods, which Stalin had maintained at levels far below

costs of production, were boosted. Consumer goods were made available in village stores. Peasant incentives were lifted and collective farms found that they had resources to invest. Khrushchev greatly expanded state investment in agriculture; in fact, the share of all state investments going to agriculture increased by half. Soviet farms also received greatly increased quantities of trucks, tractors, and other equipment, and from 1953 to 1958 deliveries of mineral fertilizer rose by nearly two-thirds.

Perhaps the most decisive Khrushchevian measure during the period 1952-58 was the plowing of about 100 million acres of virgin and idle land on the steppes of Kazakhstan, Western Siberia, and other eastern areas. The wisdom of this venture was questioned in the Soviet Union and abroad on the grounds that the climate in these areas was too arid and erratic for agriculture. But Khrushchev prevailed, and vast quantities of men and material were sent to the steppes. The results were striking. Grain harvests for the years 1954-58 were reportedly about 40 percent above the level for the period 1949-53. Higher priorities for agriculture combined with excellent weather to produce a bumper crop in 1958. The output of livestock products increased sharply. By American standards, the Russian diet continued to be monotonous and starchy, but by local standards Soviet tables were more abundantly spread than they had been since before collectivization. Buoyed by success, Soviet planners set ambitious targets for agricultural growth during the period 1959-65.

Contrary to plan, Soviet agricultural developments since 1958 have been dismal. Instead of expanding, harvests exceeded the 1958 crop only in 1962-and this is now open to serious question due to doubts about the accuracy of official data. Why has nothing gone as planned by Khrushchev and his colleagues?

Unfavorable climatic conditions have contributed to the poor showing in most years since 1958. In particular, drought has drastically reduced the productivity of the new lands. Rainfall in these areas is always sparse and irregular, and abundant harvests were possible in the first few years of their exploitation because moisture had been stored in the soil during the preceeding long period of fallow. The continuous grain cropping and inadequate fallowing of recent years have combined with paltry rainfall to deplete drastically the moisture content of the soil. Dust Bowl conditions now prevail over much of the Soviet Union's virgin lands. After a brief stay at a comparatively giddy height on the party scale of priorities, agriculture also found itself demoted to its more accustomed position after 1958. Increasing demands on scarce Soviet resources were levied by such high priority programs as the space effort, the arms race, foreign aid, and reemphasized rapid growth in heavy industry. The shore of total state investment that was allocated to agriculture declined to about the same level that it had occupied during the Stalin era. Soviet farms received only 62 percent as many trucks during the year 1959-61 as in the preceding 3 years. Fertilizer deliveries similarly lagged. In the conviction that the agricultural problem was solved, the Soviet leadership, in the words of one American expert, appeared to "sit back to watch and eat."

By the end of 1961, it was obvious to the Soviet leaders that agriculture was lagging far behind what had been expected. The 1961 harvest was reported to be 11 percent below plan, meat output trailed by 16 percent; and milk production fell behind by nearly 13 percent. A plenum of the central committee was convened in March 1962 to consider agricultural problems. By this time an intensive debate was raging in party circles over the proper priority to be accorded agriculture. At one extreme were those who argued that agriculture must be stimulated whatever the cost might be to other sectors of the economy. At the other extreme were the champions of undiminished top priority for space, military, and heavy industry. The latter opposed any measure that appeared to transfer resources from these claimants to agriculture.

The debate over priorities is dramatically illustrated in two speeches by Khrushchevone was his keynote address to the March 1962 plenum, the other his concluding remarks to the same body. Only 4 days of controversy separated the first speech from the second, but in tone and content they were far apart indeed.

Khrushchev's keynote speech contained two important proposals: The first was a retrogressive plan for the formation of a party bureaucracy to supervise the operation of collective and state farms. The second was a proposal for the intensification of Soviet agriculture, i.e., for raising acreage yields and placing emphasis on animal husbandry. To this end, Khrushchev recommended that millions of acres of grassland and fallow be seeded to grain and forage crops, and called for a broad program of technical and material aid to agriculture.

Noting that state and party attention to agriculture had declined in recent years, the Soviet Premier asserted that "some officials display unconcern and irresponsibility with respect to the urgent problems of increasing the output of equipment, mineral fertilizers, herbicides, etc." Some leaders, he said, even thought it should be possible to divert resources from agricultural investment to other sectors of the economy. Such erroneous views were alleged to be held even by unnamed persons in departments of the Central Committee. "Serious conclusions must be drawn from this," he continued. "Agriculture must not be treated lightly. The entire economy may be undermined if

the agricultural lag is not recognized and which other cherished objectives must remedied in good time."

sacrifice the resources required by agriculture. Much talk is now loose in the Soviet Union about the necessity for a crash program of irrigation and fertilizer production. A plenary meeting of the Central Commit

tee is scheduled for November to consider these programs. At present, it appears that the advocates of high priority for agriculture are in the ascendant. Time will tell if and to what extent this is true.

But in his closing speech to the same plenum, Khrushchev retreated from his demands for dramatically increased allocations to agriculture. The arguments that occasioned this retreat may be surmised from his remarks. He said: "*** measures for increasing aid to agriculture do not signify that resources will now be diverted to agriculture at the expense of the development of industry and the strengthening of the nation's defenses. The buttressing of Soviet military power is our most important [From the Christian Science Monitor, Feb. task, and we will perform it unflinchingly." The results were thus inconclusive: Farmers were asked to content themselvs with vague promises of larger material inputs and admonitions to make better use of the equipment available.

Later in 1962, the matter of priorities was made even more explicit. It had long been evident that one reason for lagging Soviet livestock production lay in the fact that state purchase prices for animal products were far beneath the average costs of production. The Soviet leadership finally recognized that, as Khrushchev put it, only "a fool is going to raise meat production if the more he produces, the more the collective or state farm loses." Higher prices were necessary, and this meant a diversion of resources from some other sector of the economy into animal husbandry. But from which other sector should those resources be diverted?

The statement announcing the price boost posed the rhetorical question: "Perhaps, for the sake of the quickest possible increase in meat and milk production, we should transfer funds to this area at the expense of our defense capacity and the development of our industry?" This alternative, however, was quickly and emphatically rejected on the grounds that: "Such a decision would create the conditions our enemies are hoping for." Instead, it was decided that the funds for the development of animal husbandry would be lifted from the pockets of Soviet consumers. On June 1, 1962, the retail prices of meat went up by 30 percent and butter prices were boosted by 25 percent.

Moderate concessions have been made to the resource requirements of agriculture in the past 2 years, but it is clear that this sector of the economy has yet to be really lifted high on the party's scale of priorities. It is also clear that significant increases in Soviet farm output are likely to be forthcoming only in response to massive resource inputs. Agricultural gains during the period 1954-58 were due, in large measure, to a vast expansion of the cultivated acreage. These were relatively cheap gains in terms of the investments required to bring them about. No such easy potentials are left to be developed in Soviet agriculture.

Each additional bushel of grain wrought from recalcitrant nature will cost the Kremlin more resources. Vast quantities of capital and chemicals will be required. If and when these are provided, the problem of motivating the Russian peasant will remain. Moreover, increased investments will bring a poor return if resources are used unwisely, which is now the case. Peasant workers and managers must be able to directly associate their efforts with a decent reward, and in the 30 years of its existence, the Soviet system of collectivized agriculture has been unable to permit them to do this. One may entertain a certain skepticism that this will change soon.

The crop catastrophe of 1963 presents the Soviet leadership with agonizing choices. They may choose to become dependent on foreign food; or they may choose to force a tightening of the citizens' belts; or, finally, they may choose to do what is necessary to develop their own agriculture. If they decide on the latter, they must again choose

SOVIET ECONOMIC WARFARE

7, 1963]

REDS FORGE CHROME LEVER

(By Pieter Lessing)

SALISBURY, SOUTHERN RHODESIA.-Unless official steps are taken to prevent it happening, the West is likely before the end of this year to become totally dependent on the Soviet Union for the supply of strategically important metallurgical chrome ore.

Metallurgical chrome is an essential ingredient in the alloys needed for the manufacture of missiles and jet engines, and also for stainless steel.

Until recently Western Europe and the United States drew all their requirements from Southern Rhodesia and Turkey, the only two countries outside the Soviet bloc where adequate ore deposits are available.

The Soviet Union is also a major producer of metallurgical chrome ore, and 3 years ago it entered the European market, offering large quantities at prices below Rhodesian or Turkish production costs.

As a result it has by now captured 70 percent of the European market.

FIRMS THREATENED

The United States, particularly with its vast defense program, continued to offer a large enough market to keep both the Turkish and Rhodesian mines in production.

Four months ago, however, the Soviet Union entered the American market as well, offering high-grade ore at $1 a ton less than it costs to produce in either Turkey or Rhodesia, and it promised to reduce prices even more if large contracts were placed.

This has meant immediate disaster for the ore-supplying industries in Turkey and Rhodesia.

In Rhodesia, one in three mines has already ceased production and the prospect is that the whole industry will come to a standstill before the end of this year. It is understood that the position in Turkey is about the same.

RECOVERY SLOW

This information and accompanying forecast were given a few days ago by G. H. the Parkinson, president of Rhodesian Parkinson, Chamber of Mines and general manager of the Rhodesian chrome mines.

"If the West's major producers of chrome ore are forced to discontinue operations," he said, "both Europe and America will be forced to rely entirely on supplies from Russia."

He explained that once the mines close down they cannot be reopened at short notice, thus making the future of ferroalloy producers and all the industries which depend on them contingent on Soviet trading policy.

POLICY PUZZLE

Referring particularly to the Soviet capture of the U.S. market, Mr. Parkinson said:

"It is difficult to understand the policy of the American Government in this matter. On the one hand they are spending many millions of dollars each month in an effort to persuade European, African, and Asian states to remain outside the influence of the Communist bloc, while on the other hand they are prepared to permit American industry to become dangerously dependent on Russian switches of policy."

The Rhodesian Chamber of Mines is convinced that the Soviet Union is pricing its chrome ores without regard to economic costs with the sole intention of forcing competition into bankruptcy in order to become the world's sole supplier.

Freight costs from Rhodesia to a U.S. port amount to $14 a ton.

The Soviet ore comes from the center of the Urals and must therefore be moved long distances by rail before being shipped on a long sea journey.

It is therefore estimated that the Soviet freight costs must be considerably higher, yet Soviet chrome ore has on occasions been offered in the United States for as little as $16 a ton.

COMPETITION FELT

American alloy manufacturers who are switching to the Soviet chrome ore have explained that they have been forced to do so because European and Japanese producers have for some time been buying cheap Soviet ore and then shipping the alloy to America to undersell American alloy producers. The only way for American producers to compete is therefore also to buy Soviet ore cheap.

Mr. Parkinson commented: "For the chrome ore producers in Turkey and Southern Rhodesia the economic consequences are serious, but the issue is even bigger than that. As chrome ore is strategically important material, both Europe and America must face up to the dangerous situation which has developed."

[From the Christian Science Monitor,
October 1963]

MOSCOW VISIT ALERTS OILMEN
(By Walter Lucas)

ROME. The visit to Moscow of Prof. Marcello Boldrini, the president of the Italian state oil corporation (ENI), is the subject of widespread speculation in the Italian press and Rome oil circles.

The natural question is: What is he doing there? Questioners note especially that the invitation came from the Soviet side. He has, to date, had lunch with Nikolai Petolichev, president of the State Committee for Foreign Trade, and had talks with Soviet experts in the chemical and petroleum business.

The interest and speculation aroused by this visit caused the press officer of ENI here in Rome to take the unusual step of telephoning this correspondent and asking him not to draw any conclusions from the visit, which was, so that official claimed, only an occasion for Professor Boldrini to meet some of his Soviet friends.

UNUSUAL PICTURE

Such an interpretation of the trip paints the unusual picture of one of Italy's leading industrialists taking the long and expensive trip to Moscow, accompanied by experts from his office, for the pleasure of social chatter among the clatter of teacups with some of the Soviet Union's leading industrial figures and managers of factories.

This may be the object of his visit, just to exchange courtesies, but, at the same time, the visit certainly offers an opportunity for some business talks, too.

In the first place, a time fast is approaching when the ENI oil deal with the Soviet Union must be renegotiated. It looks then as if the conversation in his meetings with Mr. Petolichev and other experts might well turn from social chatter to the questions of oil, petrochemicals, and synthetic rubber; both of these latter products ENI has or will have surpluses to dispose of.

HIGHER PRICES

In regard to Soviet crude oil, information gathered here indicates that the Soviet Union might be wanting higher prices for its crude than it has previously offered to such favored customers as the Italians.

Obviously, a higher price detracts from the attraction of buying Soviet oil, especially now that in the present state of the world oil market there are Western sources which might be prepared to match the Soviet price in a long-term deal. Such a deal would follow the lead of Standard Oil which recently signed an agreement with ENI for a mediumterm supply at a favorable price.

But, nevertheless, an oil deal with the Soviet Union has the advantage that it can be arranged against payment in the kind of products ENI has to offer and wishes to sell.

There are other pointers which indicate that Professor Boldrini might be exploring the possibilities in Moscow for an advantageous trade deal. For instance, Italian exports are not as buoyant as they were. The rate of increase in 1962 was not as high as it was in the preceding years, and there is nothing in the first quarter of this year to show that matters in this respect are improving.

SIGNIFICANT ITEM

With exports now assuming such an important role in the Italian economy, there is every reason that Italian industrialists should look for new markets wherever they

can be found.

It is interesting that there has recently been a noticeable increase in propaganda for greater trade exchanges with the Soviet Union. Such exchanges certainly offer great possibilities if they can be exploited and if satisfactory means of payment can be found. It is not only ENI which is interested in this direction; several large industrial corporations in the private industrial sector have been trying to line up deals, for building whole plants or providing machinery and equipment for Soviet factories.

But as far as ENI is concerned, basically the question comes back to oil. A small significant item, appearing in the press recently, disclosed that 300 new cars were taking to the Roman streets every week. If that figure is translated into national figures, some idea is given of the growing consumption of gasoline in Italy-in fact, for the first 2 months of this year (and these were winter months), this growth in consumption was 15.2 percent.

Since ENI is maintaining and even increasing its share of Italian sales of gasoline, here is one indication of ENI's rapidly expanding need for more supplies of crude at economic prices if it is to meet its liabilities, not only at home but around the world.

ENI is never tired of stating its agreement with Standard and in no way restricts its freedom to acquire its crude requirements wherever it is most profitable to do so-and that, of course, includes the Soviet Union. LEVER SUGGESTED

It has been suggested in some oil circles here that the deal with Standard could be used as a lever in the negotiations for further Soviet supplies, providing always that the Soviets are still interested in pushing their exports of crude. This depends upon domestic political and economic considerations, which are difficult to judge.

In any case, whatever may be the ultimate objective of Professor Boldrini's present visit to the Soviet Union, it can only be of an exploratory nature, since Italy is without a government, and Mr. Boldrini has no official mandate for any conclusive arrangement which might commit a government which is still to be formed.

MOSCOW CONTINUES THE COLD WAR [Lima Radio America network, in Spanish, 033, GMT, October 26, 1963] SUBVERSIVE PROPAGANDA SEIZED ON U.S.S.R.

SHIP

SÃO PAULO.-The police of the port of Santos seized large quantities of subversive propaganda aboard a Russian ship that had ar

rived from Havana. The ship was returning (200?) Chilean, Argentine, Brazilian, Paraguayan, and Uruguayan students to their homes.

[From the Baltimore (Md.) Sun,
Oct. 30, 1963]

UNITED STATES ACCUSES REDS OF LAOS VIOLA-
TIONS SAYS SENDING OF MILITARY EQUIP-
MENT IS ILLEGAL

(By Howard Norton)

WASHINGTON, Oct. 29.-The U.S. Government charged today that the Communists have violated the Geneva agreement on the neutralization of Laos.

The accusation came from an official spokesman of the State Department, who declined to say what the United States might do about the violation.

The spokesman said this country has "intelligence reports" that military equipment has been sent to the Communist Pathet Lao forces in Laos from North Vietnam.

He declared that the United States is sat

isfied that these reports are true, and that

the information has been forwarded to the

International Control Commission in Laos, which is now attempting to verify the violations.

HAVE BEEN CHECKING

The reports of the illegal shipment of arms and munitions into Laos from North Vietnam first came to the attention of the U.S. Government about 3 weeks ago, it is reported, and American sources have been checking them since then.

"The Geneva agreements," the State Department spokesman pointed out, "prohibit the introduction of armaments, munitions, and war materials generally except as requested by the Laos Government for the national defense of Laos.

"Since the Laos Government has not requested such supplies from North Vietnam," he declared, "the military supplies introduced from there are in violation of the agreement."

NOTED OFFICIALLY

The spokesman said that the U.S. Government has officially brought this matter to the attention of the International Control Commission, and that the Commission has violations of the agreement wherever they attempted and is attempting "to verify the may occur."

"But the Pathet Lao have refused to allow the International Control Commission team to conduct a meaningful investigation in Pathet Lao territory," the State Department spokesman said.

He pointedly declined to say what the United States might choose to do about the violation of Laotian neutrality, but indicated that if a serious proved violation of the Geneva agreement should occur, it would "undoubtedly lead to a consultation among the governments signatory to the agreement."

Under questioning, the spokesman acknowledged that the consultation might not include "all" the governments who signed the agreement-presumably meaning that the Communist governments might not have a part in such a meeting.

The spokesman speculated that the Communist Pathet Lao forces might be getting the new military supplies for any one of a number of reasons.

He said it might be simply to reequip the Communist forces in the country, it might be to strengthen their position, or even to enable them to carry on some limited military action.

Whatever the purpose, he said, the resupplying of these forces is a direct violation of the Geneva agreement.

AGREEMENT OUTLINED

This, according to the State Department spokesman, was brought out clearly in a

letter, outlining the agreement, written by the head of the neutralist government, Prince Souvanna Phouma, to the cochairmen of the International Control Commission on June 2, 1963.

Observers here point out that any violation of the Geneva agreement opens the floodgates to rearmament on both sides.

The violation by the Communists, for example, gives the United States the right to increase its military assistance to the central government to guard against the possibility of Communist attack.

And any increase of American or other Western supplies to the central government is likely to cause a boost of the inflow of Communist arms.

A second westbound U.S. convoy, which left Berlin with 143 soldiers on 25 vehicles at 8 a.m. was ordered by the Army to remain at Babelsberg with the unit detained there although the Russians had cleared it within 45 minutes.

A third convoy from Berlin reached West Germany without delay or incident at 11 a.m. All the troop movements were made in connection with an exchange of two Army units between Berlin and West Germany that began Monday. All such moves are now suspended.

Last May the Russians held a U.S. unit for 4 hours on the same grounds as those today. In 1959 five U.S. servicemen in four trucks were detained for 56 hours.

During much of the day a U.S. helicopter [From the New York (N.Y.) Times, Oct. 12, hovered over the scene. A Soviet Mig fighter circled the area for about 15 minutes. 1963]

COUNT OF CONVOY'S TROOPS IS DEMANDED BY
RUSSIANS

BERLIN, October 11.-Soviet forces moved armored vehicles and guns into position on the autobahn from West Germany to West Berlin today to block a U.S. Army convoy detained in East Germany since 9 a.m. yesterday.

Diplomats here and in Bonn said they considered the military action to be related to the talks between the United States and the Soviet Union on a détente. Officials em

phasized that the matter was not a local issue but had very serious implications for the entire political scene.

U.S. officials declined to comment on reports that the unit had tried to break through the checkpoint barriers but was stopped by Soviet soldiers and armor.

The convoy of 61 men and 18 vehicles was starting on the 110-mile trip to West Berlin from the West German border when it was stopped by Soviet troops for the first time at Marienborn.

After being held for 15 hours, it was allowed to proceed, only to be stopped again at 4 a.m. at the Babelsberg checkpoint, just outside West Berlin, which is an enclave in East Germany.

COUNT OF PERSONNEL ASKED

The Soviet guards demanded that the Americans leave their vehicles and submit to a count. U.S. officers rejected the demand as unwarranted under existing Western Allied rights of access to West Berlin on the ground that fewer than 75 men were in

volved.

The Russians then brought armored personnel carriers, antitank guns, and other equipment to obstruct the superhighway. The soldiers were spending the second night in their jeeps and trucks.

Five Soviet armored cars were sent to Marienborn yesterday when the convoy was halted for the first time, and a truck and trailer obstructed the autobahn.

A second convoy, bound from West Berlin to West Germany, also was detained at Marienborn yesterday.

The three Western Allied commandants met in West Berlin for almost 2 hours to review the situation after the U.S. Army had delivered two protests to the Soviet troop command at Wunsdorf.

In Bonn, the political counselors of the three allied embassies met twice to consider the situation.

Civilian traffic on the autobahn was halted briefly at noon as the Soviet armor moved into position but was later allowed to proceed in both directions on the westbound lane.

Truckdrivers coming in from the west said the Russians had set up a military camp equipped with antitank guns and an antiaircraft gun. The U.S. Army announced that the Russians had moved in about 12 armored personnel carriers, but civilian travelers reported counting 30 to 40 Soviet armored vehicles in the area.

cow and in Potsdam-a Soviet Army headquarters in Germany-pointed to a Soviet desire to exploit the incident diplomatically.

OTHER THEORIES EXPRESSED

That was the mildest of many theories offered by Government analysts. Some thought the Russians needed an opportunity to demonstrate their power in Berlin, especially after they had conceded great economic

weakness. Some noted that Premier Khrushchev had not been seen in Moscow for 2 weeks and they expressed the belief that military leaders wish, through an incident, to spoil the present East-West calm.

There also were some signs that Soviet commanders in Berlin might have wanted to avenge recent displays of force by the Western garrisons.

All sides, however, were assuming that Soviet forces in Berlin could not long act inde

[From the New York (N.Y.) Times, Oct. 11, pendently of orders from Moscow.

1963]

CONCERN GROWING EMERGENCY SESSIONS ARE

HELD AT THE WHITE HOUSE

(By Max Frankel)

WASHINGTON, October 11.-The United States protested strongly and repeatedly to the Soviet Union today against the day-long blocking of an American military convoy by Soviet troops outside West Berlin.

The convoy remained stalled on the Communist-controlled autobahn tonight, and Washington still had no satisfactory explanation from Moscow. As the hours passed, the administration took an increasingly serious view of the incident.

Officials expressed certainty that Premier Khrushchev and other Soviet leaders had had time to be briefed on the situation. Their refusal, or inability to clear the convoy at a time when both sides seemed eager to hold down tensions aroused concern and puzzlement.

The concern was expressed to the Soviet Ambassador here, to the Soviet commanders on the scene and in Potsdam, to the foreign ministry in Moscow and in public statements. It also brought about an emergency session of the four-power ambassadorial steering committee on Berlin affairs, and two meetings at the White House.

EASED ATMOSPHERE IN PERIL

The administration's view is that the longer the blockade remains in effect the more serious the consequences, both international and in domestic politics.

High Soviet officials indicated during the day that they did not intend to let the incident grow into an issue of major proportions. But their first reaction was to support the technical demands of their officers on the scene. U.S. authorities said that nothing less than release of the convoy would satisfy them.

The feeling here was that the timing of the new dispute threatened to spoil not only the conciliatory atmosphere of recent weeks but also the political tolerance for conciliation that President Kennedy has tried to develop in the United States.

Only 48 hours ago, with some political risk, the President authorized the sale of at least $250 million worth of wheat to the Soviet Union.

Yesterday, while the same convoy was being held for 14 hours at the West German end of the autobahn, the President and other officials conferred for more than 8 hours with Andrei A. Gromyko, the Soviet Foreign Minister.

Leading Government officials continued this evening to give the Soviet Union what they called the "benefit of the doubt." They meant their readiness to believe that the autobahn incident was local in origin and was not ordered from Moscow.

But they also believed that Moscow's failure to resolve the dispute promptly after strong protests were delivered here, in Mos

The immediate issue at the Babelsberg checkpoint, near the Berlin end of the 110-mile autobahn through East Germany, was a Soviet demand that the American soldiers in the 18-vehicle convoy dismount for an individual count. The Americans refused. Behind this situation lies an even subtler

problem.

the right of Soviet guards to inspect or other

The United States has never acknowledged

wise issue orders to any military convoy on the highway.

For some time, however, "as a convenience," U.S. commanders have made it a custom to show their troops for counting whenever the number of passengers in a convoy exceeded 30. There was some doubt here today about whether this number had ever been given to the Russians.

Drivers and codrivers of vehicles were not included in this American calculation. As

far as could be determined here the number of soldiers in the stalled convoy was below 30, but the 18 drivers and some codrivers presumably made a total of more than 30.

PREVIOUS DELAYS

Two- to three-hour delays on the autobahn have been imposed on military convoys almost regularly, at least once or twice a week. At times, considerably longer delays were imposed by some technical argument.

The convoy now blockaded, however, has had a particularly rough journey. It came onto the autobahn at the Marienborn checkpoint about 6 a.m. yesterday, New York time.

When it had been stalled there more than 8 hours, Washington was alerted.

The news was rushed to Secretary of State Dean Rusk just before he went to the White House meeting between President Kennedy and Mr. Gromyko.

American officials raised the incident as an example of the kind of thing that must not occur if relations are to improve, but Mr. Gromyko professed ignorance of the situation.

Mr. Rusk saw the Soviet diplomat again at dinner last night, but by then he thought the incident was closed. The convoy was passed through the Marienborn checkpoint about 7 p.m., after a delay of 14 hours, presumably without any concession to Soviet demands.

About 3 hours later, however, while diplomats were still at dinner at the Soviet Embassy here, the convoy reached the Berlin end of the road and was again denied clearance.

At 5:45 this morning, New York time, after a delay of 7 hours, the convoy's commander threatened to proceed past the checkpoint without clearance, if necessary. An hour later he ordered his men to raise the bar across the road and ordered the vehicles forward.

After moving only a few yards, however, they were stopped again, this time by eight Soviet armored personnel carriers. Another convoy was hastily mounted by Americans in Berlin and sent to the checkpoint.

It was cleared quickly and without incident, but then parked on the road to assist the stalled vehicles in case of trouble. Both

have been there since.

[From the Washington (D.C.) Star,
Oct. 22, 1963]

REDS AGAIN EYE BERLIN ISSUE (By Edmund Stevens) Moscow. With the nuclear test ban sealed, signed, and delivered, the Russians show symptoms of again pressing for the oft-threatened, oft-postponed showdown on West Berlin.

At a glance, this seems inconsistent: First Moscow takes the initiative in pressing for a test ban and improved relations with the Western Powers, in order to revive the one issue sure to generate tension.

The Kremlin sees no inconsistency. The desire for a test ban and an accommodation with the West was spurred by its mounting trouble with Red China for the Russians are determined to avoid the prospect of having to face threats from opposite directions simultaneously.

WANT NEUTRAL WEST LINE Because of the new menace along the vast length of the border with China, the Russians would like to neutralize their Western approaches. But they consider this impossible while the Western Powers continue to Occupy West Berlin and while West Germany is committed to a policy of rearmament.

Because the horrors of the Hitler invasion are still etched in people's memories, German rearmament is a highly emotional issue here. The Kremlin leaders have deliberately played it up for political reasons.

This helped reconcile the citizenry to sacrifices for the sake of defense. It also helped to keep the Poles and other restive satellites in line.

But as sometimes happens, the Kremlin ended by believing its own propaganda, especially since the propagandists selected and collected evidence which, though onesided, made a fairly convincing case.

DIRECT ATTACK

The proposal for a nonaggression pact

between NATO members and the Warsaw

[blocks in formation]

But the main reason for painting the outgoing Chancellor in the blackest colors was to make his successor, Ludwig Erhard, look good by comparison on the theory that any change from Mr. Adenauer could only be for the better. Although hardly wild about Mr. Erhard, the Kremlin is at least prepared to give the benefit of a doubt.

About 2 years ago Mr. Khrushchev seriously flirted with the idea of making a separate deal with West Germany, bypassing the

United States and Britain.

He made overtures to Mr. Adenauer though Hans Kroll, then West German Ambassador

to Moscow. Mr. Kroll had a strong empathy for Mr. Khrushchev-the saying around the Moscow diplomatic colony was that these two saw eye to eye, being of almost identical height and build.

And Mr. Kroll's response to Mr. Khrushchev's feelers was so eager as to prove his undoing. For Mr. Adenauer spurned Mr. Khrushchev's proposition and Mr. Kroll was recalled for exceeding his mandate.

L'affaire Kroll was never fully ventilated, but apparently the Kremlin was prepared to go a long way toward reunification and economic relations in return for West Germany's giving up NATO and acceptance of an Austria-like neutrality.

The reason the Russians, after blowing hot and cold on their demand for the signing

of a German withdrawal from West Berlin,

may now be set on forcing the issue ties in with their belief that the threat from China, while serious, is not immediate.

The Kremlin may consider its bargaining position with the West is better now than it will be when China is strong enough to press its challenge. And the Russians probably hope that with Mr. Adenauer out, the Bonn government may prove more malleable.

Treaty powers, which Foreign Minister Andrei
Gromyko first tried to crank into the test
ban negotiations, was the first move in the
renewed Soviet diplomatic offensive on the NEEDS OF OUR CITIZENS MUST BE
issues of Germany and West Berlin.

Since the reception this proposal received in NATO chanceries was less than lukewarm,

the Kremlin, as an alternative to an oblique approach, has since trained its sights directly on the target. Thus, Premier Khrushchev, in his message to President Kennedy on the coming into force of the nuclear test-ban treaty, referred to the need for "liquidating the remnants of World War II." In Soviet parlance this is synonoymous with the signing of a German peace treaty and demilitarization of West Berlin.

For several months prior to this, the Soviets ignored the Berlin issue, muted their press attacks on NATO and even toned down their criticism of the Bonn Government to keep from rocking the boat before the test

ban was settled.

But now, along with the revival of the

German peace treaty-West Berlin issue, Moscow has resumed its attacks on NATO, pegged principally to the project for a multinational nuclear force which is pictured as a Bonn inspired subterfuge for getting nuclear weapons into West German hands.

Simultaneously, on the eve of Konrad Adenauer's resignation, the Soviets mounted the old man, accusing him of filling his administration with former Nazis and SS troopers and plotting preventive war against the U.S.S.R. The Soviet Foreign Ministry even issued a statement charging Mr. AdeCIX- -1322

FULFILLED FIRST

Mr. GRUENING. Mr. President, at a recent banquet in Charleston, W. Va., our able and distinguished colleague, the senior Senator from West Virginia [Mr. JENNINGS RANDOLPH], gave as his opinion that it was more important to help people on earth than to hurry a man to the

moon.

A somewhat similar theme, expressed differently, was eloquently voiced the week before last by the junior Senator from Arkansas [Mr. FULBRIGHT], who said it was desirable, in our spending, to establish some priorities. He emphasized that it was more important that we cut down on space and some other ex

unemployed, this great curse in this land of plenty and abundance, and the wealthiest Nation on earth, before we start on ventures overseas.

This idea has relevance to the debate now going on in connection with foreign aid. I am not opposed to foreign aid, but I think its extravagant expenditures could well be reduced in a number of countries which no longer need our aid, for various reasons. Some of the money could be used to put the unemployed back to work.

While we are debating the authorization of the expenditure of several billion dollars in foreign countries, our funds for public works at home have run dry. Hundreds of worthwhile projects are processed and waiting to be put into effect, but cannot be because there is no money. That, at the same time we are discussing an expenditure of $4 billion to give proper consideration to our own in foreign aid, is in my view a failure

citizens.

I pay tribute again to the able speech of the distinguished Senator from Arkansas [Mr. FULBRIGHT], made a week ties, which agrees with the view I have, and a half ago, on the subject of prioria view which we cannot emphasize too much. I think our first priorities should be for domestic needs, to putting our unemployed back to work. So long as 52 percent of our people are out of work, our first duty is to work on that problem. I have pending an amendment to increase our accelerated public works fund. What we eliminate from the foreign aid, and space programs, should be expended at home for needed public works projects that help diminish unemployment.

I ask unanimous consent that the editorial which quoted the distinguished Senator from West Virginia [Mr. RANDOLPH], entitled "Needs of Our Citizens Must Be Fulfilled First," which appeared in the Charleston Gazette of October 30, be printed at this point in my remarks.

There being no objection, the editorial was ordered to be printed in the RECORD, as follows:

NEEDS OF OUR CITIZENS MUST BE
FULFILLED FIRST

Voices throughout the land are being raised in opposition to the continuing exlunar space probe and to agument the Nation's "overkill" and conventional arms supply.

penditure of fantastic sums to accelerate the

It wouldn't be accurate to claim that these voices represent a majority, but many public officials, businessmen, labor leaders, and private citizens are having hard second thought about the billions upon billions being pumped into the economy for purely destructive purposes and for the questionable purpose of placing a man on the moon. One of the leaders in this fight, we're

penditures, and concentrate our spend- happy to report, is West Virginia's own
ing on some of our domestic needs, such
as education.

It was natural that our able colleague [Mr. FULBRIGHT] should emphasize the importance of education, he being a former university president, and having been a pioneer in extending education in the international field, through the Fulbright scholarships.

Likewise, I feel it is our duty to focus our attention on problems at home, and it is more important to take care of the

Senator RANDOLPH.

The other evening in Charleston at an AFL-CIO banquet, Senator RANDOLPH told the audience that in his opinion it was much more important to "help people here on earth than hurry a man to the moon."

He acknowledged the necessity of the United States meeting its foreign aid, defense, space and nuclear obligations. But he doubted that withdrawing a mere billion from these programs and using it to assist the Nation's jobless and impoverished would seriously jeopardize these obligations.

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