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grinder of final appropriation votes in both role the United States was to play in any other to reorganize the program. He Chambers.

helping those countries along the road to has placed it within one agency, and has For a Democratic President, it is not com- stability and freedom as independent put it in the hands of Mr. David Bell, forting to realize that the fight against for

states. eign aid is being led by other Democrats in

who, in my judgment, is the ablest Dithe Senate-FRANK CHURCH, of Idaho, WAYNE I believe the record which has been rector yet. It is doubly ironic that it MORSE, of Oregon, ALBERT GORE, of Tenness written in the intervening period has should come under a President who has see, and ERNEST GRUENING, of Alaska. But been highly constructive. It demon- been responsible for the most important the answer to their opposition is that after strates how foreign aid can be used to innovation in foreign aid that has ocall these years they have become impatient best advantage.

curred since President Truman's famous and frustrated with a program that threatens to go on forever.

Apart from industrial Europe, those of point 4 plan inaugurated technical as

us who have observed the foreign aid sistance, years ago. I refer, of course, DOLES FOR 107 NATIONS

program most closely, who serve on the to the Peace Corps, which has been a Although the world presumably is in better Foreign Relations Committee, have seen Kennedy triumph and has demonstrated economic shape than it was just after World much evidence that the program has

that it is possible to reach other counWar II, our foreign aid statistics don't show it. Uncle Sam is still doling out dollars to proved effective in those parts of the tries on a people-to-people basis. The 107 countries, and is continuing to subsidize

world where it is the most modest, where Peace Corps has probably done more to in whole or in part the military budgets of we have relied chiefly upon technical improve good feeling toward the United even the relatively wealthy nations. Japan assistance, the use of surplus food, and States in the underdeveloped world than got $70.5 million in military aid in fiscal the Peace Corps, even though these pro any other phase of foreign aid. 1962, the United Kingdom got $21.2 million, grams represent the least costly part of

So I stress that the reasons for this Italy $70.7 million, and little Denmark $44.4 foreign aid in general.

revolt, if indeed it should be called a remillion, France, where De Gaulle has been threatening to go it alone, got $5 million.

We have grown to suspect that money volt, have little to do with the President, If peace should break out, military aid is often wasted on large and expensive who is to be commended for the initiapresumably can be cut or eliminated, but projects in countries, where the size of tive he has shown both in establishing other aid smacks of the eternal. Senator our investment cannot be reasonably re the Peace Corps and in placing the manGRUENING cites the case that "in the year lated to our real national interest.

agement of the AID program in such 2003 in Greece our Embassy will still be pass Therefore, I believe it well to say a few competent hands.

competent hands. Rather, the reasons ing on loan agreements for petroleum storage

words of praise respecting the adminis are cumulative in character. They exfacilities, service stations, appliance manutration of the foreign aid program in

tend back over the years. They reprefacturing facilities, and the like."

Africa, where principles have been fol- sent a gathering impatience and frusGIFTS, NOT LOANS

lowed which commend themselves to our tration in Congress, due to the inability These liberals also have reached the conattention.

of Congress in preceding years to effect clusion that the foreign aid program has been financially unrealistic in its tendency

Mr. GRUENING. Mr. President, will

Mr. President, will needed reforms in this program, so as to concentrate on outright grants rather the Senator yield?

to bring it into better touch with reality, than loans. Europe could be paying us

Mr. CHURCH. I yield.

to eliminate excesses, and, indeed, to back the money it received under the Mar Mr. GRUENING. I wish to second strike from the program portions that shall plan if that money had been in the what the distinguished senior Senator ought long ago to have been sloughed form of loans, and our balance-of-payments from Idaho has said in regard to certain

off by the administrators themselves. deficit would not now pose such a grave countries. In an inspection trip of our

The very fact that in 1962 we were givproblem.

foreign aid program for the Government ing aid, in one form or another, to 107 But even when Uncle Sam has doled out his substance in the form of loans, he has

Operations Committee, when I studied recipient countries, only 8 fewer than remained a Santa Claus. Most of the loans the program in 10 countries in the Middle there are in the whole world, outside the are made on a 40-year repayment basis, with East, I found that in 2 of them the Iron Curtain, indicates the degree of the interest rates as low as three-fourths of 1 program was admirably administered failure of the administrators ever to put percent, and with no firm insistance on and working well. My recommendation an end to aid programs once commenced, principal repayments. In contrast, the So was that it should not merely be sus

even in countries that have long since viet Union never lends money at less than

tained at its existing level, but increased. become self-sufficient and able fully to 2 percent.

Those two countries, for reasons which provide for themselves.
BLOCKS ERECTED

I gave in my report, were Jordan and I am encouraged that the Committee
Senator FRANK LAUSCHE, Democrat, of
Tunisia.

on Foreign Relations has seen fit, this Ohio, has offered an amendment to the foreign aid bill setting a minimum three

What the Senator from Idaho is say- year, to adopt an amendment which I fourths of 1 percent interest rate for the first

ing is that we should be more selective myself proposed, and have worked hard 5 years and a minimum of 2 percent for the and that we should pick out the countries for over the past 2 or 3 years, an amendnext 30 years, with a maximum 35-year re where the program has a good chance of ment that would prohibit further grants payment period. CHURCH has won approval working, where there is a disposition to of aid to economically self-sufficient of the Senate Foreign Relations Committee

work with us, and where the general countries, located in Western Europe and of a ban on further grants-in-aid to selfsufficient countries. And the committee also

principles outlined by President Kennedy including Japan, where we were granting has adopted an amendment by GORE which

are being followed. I have held that some $400 million in military assistance would place a $100 million ceiling on Ameri

view ever since I came to the Senate as late as 1962. This amendment means can contributions to any project abroad. 5 years ago. My hope is that as a result that we can begin to turn off some of

All these repair jobs on the program make of the current debate we shall be able the spigots that have been opened in sense, in the enlightened self-interest of the to eliminate some countries where the the American foreign aid barrel, that we United States. And Kennedy would do well money is being wasted and is not being can begin to focus the program on reto listen to the counsel of these liberals who in the past have risked disfavor at home by

well administered. If we do that, we gions of the world where it is really their support of foreign aid. It is these men

shall have a much better, more workable needed, and thus put an end to the subwho will save the program from the meat ax program.

sidization of countries that have long if the administration will let them.

Mr. CHURCH. I sympathize with been able to take care of themselves-inMr. CHURCH. I wish to say a few

what the distinguished Senator from deed, countries that are now enjoying

Alaska has said. I am aware of his ex- levels of prosperity unprecedented in words about one phase of foreign aid

cellent report. I believe the application their history. that I believe deserves strong commen

of the program in Africa is a good case Mr. MORSE. Mr. President, will the dation, and that is the program in tropi- history of how foreign aid can be ad

history of how foreign aid can be ad- Senator from Idaho yield? cal Africa, which I had occasion to visit

ministered to advantage. For these rea Mr. CHURCH. I yield to the Sen2 or 3 years ago. At that time, many

sons, I should like to make a few re- ator from Oregon. African countries had already achieved marks concerning the program in this Mr. MORSE. As the Senator knows, independence. Some others were mov region of the world.

in many places I am high in my praise ing toward independence, and the prep Before I do so, I wish to stress the fact of not only the amendment the Senator arations were then well underway. The

that it is ironic that the revolt against from Idaho offered in the Committee on Government of this country faced a very foreign aid should come to a climax un- Foreign Relations, about which he spoke, special challenge in determining what der a President who has done more than but of a good many other amendments

he has offered. I congratulate him that they are paying extravagantly for our government, either in this century again. I was proud to support him a program they can no longer support, or at any time in our history. there, and I am proud to support him they will rise up in such a way that Con Mr. CHURCH. Mr. President, I aphere.

gress will ultimately strike it down com- preciate very much the support the SenI wish to join him in the comments pletely, and thus deprive the President of ator from Utah has given to me in my he has made in regard to this bill as an essential tool that he needs for the efforts to amend the foreign aid bill, they affect the President of the United direction of American foreign policy in particularly in reference to finally cutStates. Of course, any of us who do not our contemporary world.

ting off further grants of aid to rich and agree with all parts of the bill will be Reform is our purpose. I believe that, self-supporting countries. His endorserepresented, as the Senator has put it, in the highest sense, we serve the real ment of my amendment and his efforts as being in some kind of revolt. But need of the foreign aid program, if it is in its behalf on the floor of the Senate we are not revolting against the Presi- to be sustained through the years ahead. are greatly appreciated. dent. To the contrary, we consider that Mr. MOSS. Mr. President, will the Similarly, Mr. President, I have very what we are doing is in the best interests Senator from Idaho yield?

much appreciated the support I have of the President; otherwise we would not

Mr. CHURCH. I am glad to yield to received from the distinguished Senator be doing it. We happen to believe that the Senator from Utah.

from Alaska [Mr. GRUENING). the amendments we are seeking to have

Mr. MOSS. I commend the senior

Mr. SIMPSON. Mr. Presidentadopted would strengthen the bill, and Senator from Idaho for his remarks on

Mr. CHURCH. Mr. President, I know thereby strengthen the position of the the bill before the Senate. As much as the Senator from Wyoming is a kindred President in carrying out a sound Amer

any other Member of this body, he has soul in connection with this matter, and ican foreign policy.

given long and searching study to the I am glad to yield to him. Let me cite one example of what I problem of foreign aid. I was happy to

Mr. SIMPSON. Mr. President, I was mean. When the time comes, we shall join the Senator when he presented his glad to join in the amendment of the be offering amendments that will seek amendment to terminate aid to advanced Senator from Idaho. I regard it as one to reduce aid to Europe, because many of countries, countries which have com of the most realistic amendments prous feel there is no justification for a pletely recovered from war devastation, posed to the bill; and some very good continuation of the aid we are giving primarily European countries and Japan. ones have been submitted. The people to Europe. We believe that if our I was delighted when the Committee on of the country are becoming disturbed amendments are adopted, the diplomatic Foreign Relations accepted the Senator's about the great amounts of largesse we arm of the President will be greatly amendment and made it a part of the bill. are giving many foreign countries, strengthened in his negotiations in

I agree with the Senator that in many especially the rich and self-supporting Europe, in connection with NATO. It places in the world we are using our

countries; and such amounts should be should be clear to everyone—if it is not, resources to the maximum advantage of eliminated. I am at a loss to understand why—that this country, by doing for underdeveloped As I recall, since the inception of the NATO needs to be revised, NATO needs countries the things that are needed to program we have given approximately to be reformed, NATO needs to be re

enable them to become independent and $128 billion to the various countries we adjusted to the economic realities of free, and not dependent upon and subject have aided. It is high time that, inEurope and of the United States. Those

to the pressures and whims of other great stead of continuing these contributions, economic realities I have made per- powers.

we begin to eliminate our grants and fectly clear. We should not be called

As I understand our foreign policy, it other forms of aid which really are not upon to make the expenditures we are is to create a world of free and in needed. now making for Europe. There should dependent nations, each with its own So I compliment the Senator from be a cutoff.

interests to defend, and provide them Idaho on his expressions; and I am glad As the Senator knows, I have said that with enough economic viability and to join him in supporting his amendI am perfectly willing to take the sav- enough national defense to enable this

ment. ings that would be made in Europe and to be done. I think we have made great

Mr. CHURCH. I thank the Senator spend them for economic aid in understrides toward that goal.

from Wyoming for his support. developed areas of the world where there

I concur in the views of the Senator

Mr. President, I began by saying a is a great need for us to save millions that we must refine and improve the few words about what I consider to be of people from going over to commubill. My only hope is that in the time

a showcase for good foreign aid adnism. Would that weaken the Presiwe have for the consideration of the bill,

ministration—in tropical Africa. I have dent? It would strengthen his position and considering the close, two- or three

been diverted—happily—from that obas the leader of American foreign policy. margin votes, we do not so scramble the jective by the opportunity offered me to But I offer one comment, in case the bill that we shall have accomplished on

engage in colloquy with other Senators. Senator does not suggest it: There are There are the floor of the Senate what the Sena

At this time, I wish to revert to my partisans who seem to think that even tor was talking about, namely, ultimately original subject, because I think it though we may disagree with the policy destroying the aid program. I agree

should be presented as an example of of the President, we should nevertheless that there must be improvement; and I

what can be accomplished by means of go along with a wrong policy. That I believe we have gone a long way in im

foreign aid with the expenditure of only will never do. That is not the way to proving the bill before us. I hope that moderate amounts of money, in an area support my President or to support my we can finally conclude with a bill that

of the world of great potential imporconstituents. I have no doubt-in fact, will permit the program to continue un

tance to the United States. I know that the President would not der the excellent leadership that is now

I believe it can correctly be said that cast the same votes that I am casting on being given by the Director of AID, in

this administration has undertaken a some of these amendments; but I also whose commendation by the Senator new African policy which

has been exsay that if the people believe the Presifrom Idaho I concur.

ceptionally successful. From my own dent would cast the opposite vote to every vote that I will cast on the bill, I

I look forward to the time when the observations in Africa 2 years ago, I program can be tightened and can be

know how tenuous was the position of do not believe it. I cannot say more. I

the United States at that time in many think I know what I am talking about. made applicable to present-day condi

of the newly independent countries, and tions. Nothing is static; nothing remains Mr. CHURCH. Indeed, the senior

how great was the suspicion of the the same. What was programed a year Senator from Oregon does know what he

United States, and how large was the is talking about. I commend him for the meet the present situation. So I hope we ago or 5 years ago must be changed to

criticism of our foreign palicy as being leadership he has given to the effort, not

too closely tied to that of Western shall move on. to gut the foreign aid program, but to

Europe, and as not giving proper recogreform the foreign aid program. If it is

I commend the Senator from Idaho, nition to the legitimate aspirations of not reformed while there is still an op

and I gladly support him in his objec- the African people. We were suspect; portunity to do so, a period of reaction tive. I hope Congress can enact a bill and I believe it is little short of the exwill set in. The pendulum will swing which will continue what I consider one traordinary that, in the intervening 2 back. If the American people finally feel of the great imaginative movements of years, the general attitude toward the

IMPORTANCE

OF

U.S.

United States in so many of these African purely supplementary to, and do not ways there is a greater affinity between countries has changed so wholesomely supplant, those of other free world do the United States and Africa than beFor this, I give credit where credit is nors. It is a policy which helps both the tween Africa and Europe. Africans look due—to the President : of the United Africans and the Europeans to replace

Africans and the Europeans to replace to the United States for leadership in States, who has shown a keen personal former colonial ties with more nearly

former colonial ties with more nearly many fields, such as education, where interest in Africa, and has given much mutual relationships. It is a policy the American way may be more suitable personal attention to African leaders which has already provided political div- than the European. who have come to the United States. idends for the United States in the inter What would we gain if we terminated They are responding to his attention, and national community, both in the United our small foreign aid programs in the 15 they honor and respect the President Nations, where Africa commands a large African nations receiving limited U.S. of the United States—men who 2 years percentage of the total votes, and in some assistance? We would save about $14 ago were openly and bitterly critical of ticklish situations last year in Cuba and million a year. Personally, I would this country.

the Congo. It is a policy which recog rather see that small amount shaved off Second, I think special credit should nizes the Africans' determination to re the program somewhere else than give be given to the Assistant Secretary of tain their independence by providing

tain their independence by providing up our limited program in almost half of State for African Affairs, Mr. G. Men- them with other friendly commercial and Africa. nen Williams, who has done an extraor- economic ties, so that they do not feel We would also achieve, if it can be dinarily fine job in building good will obliged to turn to the Communists to called an achievement, a reduction in toward our country throughout the avoid appearing wards of Europe.

the total number of countries receiving African Continent.

It is also a policy which, despite its U.S. assistance. I can appreciate the THE DEMONSTRATING

essentially political character, is based annoyance of many observers that we INTEREST IN AFRICA THROUGH LIMITED PRO on sound principles of economic develop are providing aid to far too many counGRAMS OF FOREIGN ASSISTANCE

ment. In accordance

with

section tries of the world, including some former Mr. President the United States has a 211(b) of the Foreign Assistance Act, and colonies which it is generally agreed a vital interest in the new nations of with various other congressional injunc

with various other congressional injunc- should be primarily the responsibility of Africa. This interest can be expressed tions, assistance to these 15 nations is Europe. I share the Foreign Relations in many ways. One of the most effec- largely limited to technical assistance. Committee's concern for greater selective expressions of our interest in the There are no luxuries, no monuments, no tivity and concentration in the foreign future of Africa is our willingness to in- prestige projects. Last year, for ex aid program. vest, in cooperation with the Africans, ample, in Gabon $275,000 of foreign aid It was for this very reason that I sponin programs for helping the Africans to funds went for buying American mate

funds went for buying American mate- sored the amendment to cut off further help themselves. While recognizing

rials for a joint AID-Peace Corps project grants-in-aid to the rich and self-suffithat large-scale investment is not yet of assisting in building rural schools. cient countries located in Western Eufeasible in most of the new states of In Senegal, local currency from the sale rope and including Japan. Africa, it is essential for us to participate of U.S. rice was used to construct second But the question of U.S. "presence" jointly with the Africans in limited pro- ary schools. In Upper Volta, $49,000 is not primarily a question of selectivity grams of technical assistance, and, when was used to demonstrate a new U.S. vac or concentration. The aid program in circumstances permit, in prudent capital cine which promises to eradicate measles, Africa as well as worldwide is now highly development projects.

one of the country's major child-killers. concentrated. The transfer of $14 milSeventy-two percent of the foreign aid In each case, the project was fully con

lion to some other part of the program flowing into Africa comes, of course, sistent with development criteria pre would hardly contribute toward greater from Europe. In at least half of Africa scribed by Congress for self-help, eco concentration. our programs consist almost entirely of nomic and technical soundness, and I also think, as David Bell, the head of technical assistance activities. Out of suitability with respect to the country's our foreign aid program, has said, that the 34 African countries which received development plans.

we should work ourselves out of a job as U.S. aid during the past year, 15 coun The role of the United States in these soon as possible. The number of countries, formerly French and Belgian colo- 15 countries should continue to be not

tries receiving assistance should decline nies, received only token U.S. assistance. only limited but also secondary to that

as countries become self-supporting. Our aid programs in these 15 coun

of France and Belgium. Contrary to the But it would be cutting off our nose to tries are so small that only 95 foreign statement on page 5 of the Foreign Rela

spite our face if we eliminated our small aid employees are required. There are tions Committee's report on the bill, foreign aid programs in half of Africa no separate and distinct aid missions. however, I think the United States should just to be able to reduce the number of The few aid personnel running the pro- continue to maintain its presence in

countries receiving assistance. gram are supported administratively by these 15 countries through limited pro

Three years ago the Senate took the the American Embassy.

grams of assistance. The word "pres- initiative in creating a special program Compared to the size of the foreign ence” is both unfortunate and mislead

for education in tropical Africa-a proaid program generally, the amount of ing. It is not U.S. "presence" as such

gram which would be ended in almost U.S. aid money involved in these 15 which is important; it is the effective half of Africa if our assistance to these nations is very modest-amounting dur- expression of U.S. interest in these coun

15 nations were terminated. The Sening the past year to only $14 million, tries, and the building of relationships ate has also indicated in other ways its which is less than $1 million per country, for our mutual advantage. For the appreciation of the importance of proand only 5 percent of our economic as- United States merely to be present in a

viding U.S. assistance to the new nations sistance to the entire continent of Africa. country in the form of a few technical

of Africa. Despite objections to the It should also be noted, in passing, assistance projects is virtually meaning

number of nations being aided, and the that U.S. aid to Africa is highly selective less unless those projects can produce seeming lack of justification for a U.S. and concentrated, with 5 of the 34 Afri- both direct and indirect results of lasting

"presence" as such, I know that the Sencan countries getting 55 percent of our

ate will continue to recognize the imbenefit. total African commitments last year. It is in the interest of the United States limited, where expressions of our in

portance of such assistance, even though The policy underlying our limited pro- to help Africa remain free from Com- terest and influence are still essential. grams in these 15 countries is one of

munist subversion or domination. It demonstrating, in a prudent and respon

I believe that what I have said with sible way, U.S. political and humanitari- also is in the interest of the United States

respect to economic aid in Africa is an interests in Africa. It is a policy to help African nations to develop along wholly justified. It can be looked upon as which backs the aspirations of the Afri- Western lines, and especially along

a kind of a showcase of what can be accan peoples without involving us in long- American lines. In order to influence complished under the foreign aid proterm or high-cost high-cost commitments or the course of events in this direction, we

gram, particularly in conjunction with precipitating unrealistic expectations on not only need to help the Africans to the activities of the Peace Corps, and their part. It is a policy of restricting control Communist subversion; we also for relatively modest amounts of money. the kind and amount of U.S. economic need to provide an alternative to com But I do not wish what I have said assistance, so that our programs are plete dependence on Europe. In many respecting economic aid to be considered

an endorsement of the military assist- agreement having

agreement having been made with Mr. ELLENDER. Yes. In regard to ance program that is commencing in Af- Nigeria.

that 72 percent, does the Senator have rica. I cannot think of any part of the Mr. CHURCH. I believe a careful any idea how that aid comes about? For world where there is less need for start- reading of my remarks will make clear his information, I made a study of the ing an arms race, where its effects could that they have to do with legitimate subject while I was in that area. Much be more poisonous, where its end results technical assistance and do not relate to of it is not a direct aid program; that could be more fraught with mischief, or the larger program in Nigeria which is, it is not a program in which the where the whole process could be more involves Development Loan Fund money. French Government furnishes so much inimical to the national interests of the Mr. ELLENDER. During the course money. The French Government buys United States, than the Continent of of the debate on the pending bill, I have peanuts or some other commodity at a Africa. I am distressed that we are com- assumed the same attitude that the Sena- subsidized price. The commodities could mencing a military assistance program tor is now stating as to assisting certain probably be bought much cheaper on the there which cannot possibly do other countries with technical aid. When we world market than they could from, let than waste the thin reserves of those speak of technical aid, we do not mean us say, Mali, Nigeria, or from Senegal, countries, and might indeed contribute the granting of huge sums of money, in where peanuts

grow in

abundance. to difficulties, if not open warfare, be- the guise of technical aid, which are

What the Government does is to pay a tween them. So, in that respect, I op more or less for capital investments. subsidy so that farmers can receive a pose foreign aid in the form of military Mr. CHURCH. The Senator is cor- sufficient income to make both ends meet. assistance on the Continent of Africa. rect.

Mr. CHURCH. The Senator is corBut I wish the RECORD to show that pro

Mr. ELLENDER. That is what I have rect. This is one of the major forms of grams of technical economic assistance been criticizing. My report is full of such aid extended to this part of Africa by in many parts of Africa which have cost cases, wherein under the guise of techni- the French. However, as the Senator modest amounts of money are a good il- cal assistance we have been passing on to knows, additional aid is furnished in the lustration of a phase of the foreign aid many countries huge amounts of money form of salaries to administrators or to program that is being well administered, which are really for capital investments French technicians or others who are and for which the State Department and rather than technical assistance. That is assisting the people and the governments the administration deserve much credit. the bone of my contention.

of the new countries. Mr. ELLENDER. Mr. President, will Mr. CHURCH. I agree wholehearted

Mr. ELLENDER. There is some in the Senator yield? ly with the Senator that technical assist

that regard, but the aid of the British Mr. CHURCH. I am happy to yield. ance should not be used for other pur

amounts to a pittance, compared with Mr. ELLENDER. Has the Senator poses than those intended by Congress.

the cash furnished by the French or by named the 15 countries to which he has It is well defined in the law and should the Belgians.

the Belgians. As I pointed out on sevbeen referring? be administered accordingly.

eral occasions, for every dollar spent by Mr. CHURCH. I have not named

I invite attention to the fact that the the British by way of subsidies or out them in the course of my remarks. I

same thing applies to the contingency of the pockets of the taxpayers of Great could supply the list of names. Mr. ELLENDER. I presume that those the contingency fund. The question has fund. The pending amendment involves Britain, France probably spends $5 or $6.

The British have been successful in countries are in French Equatorial Af

been asked, “Why support the Humphrey utilizing the resources of the countries rica?

amendment?" It is unnecessary, it has in which they operate to obtain sufficient Mr. CHURCH. Many of them are.

been urged, since the President will have funds to develop the economy and susMr. ELLENDER. And French West

ample money in the contingency fund to tain the people. They have done that in Africa? Mr. CHURCH. That is correct-tropi- should he choose to do so. transfer to the Alliance for Progress Ghana as well as in Nigeria.

Mr. President, what irks me is that cal Africa.

the huge amount of assistance that we Mr. ELLENDER. I hope the Senator

But this argument has no substance.
It is a debater's point, because Congress would not inure to the benefit of the

propose to make available to Nigeria has not included Nigeria.

has made it perfectly clear what the purMr. CHURCH. I have referred gen

of . erally to the program in tropical Africa, pose of the contingency fund is. It is inure to the benefit of a vast number of

. where the primary reliance has been on

Mr. ELLENDER. Unforeseen.

Greek merchants, Indian merchants, and technical assistance. I shall be happy

British nationals who are there and in

Mr. CHURCH. Emergencies of such absolute control of all the resources in to provide the names of countries if the Senator wishes them.

importance and immediacy that there that area. It seems to me that we should Mr. ELLENDER. Does the Senator is no possibility to foreplan. The Pres

not agree to furnish the Nigerian Govknow that under the guise of technical ident has used the contingency fund in ernment with $225 million, when the assistance, we furnished to many of the

this way. If he were to take money out British have agreed to furnish only $50 countries to which he has referred, ma

of the contingency fund merely to add million, although they own and control chinery worth thousands of dollars, such it to a scheduled, predetermined Alliance

those industries. I believe we should as road equipment-scrapers, and things for Progress program to Latin America, look upon that with

resentment. It irks like that? The Senator will no doubt rethe Senate would be the first to call his

me no end when I find instances such as member that I always felt the Foreign representatives before it to account for

that. Aid Act should be changed to allow misuse of the contingency fund.

On what authority, I add further, does purely technical assistance to be sepa This is not an argument against the the Secretary of State or any of our AID rated from development assistance.

amendment; it is a better argument for administrators go into a country and say, As I pointed out in my report, any

the amendment. I urge all Senators who "You can depend on it that the United number of countries received aid which believe that the Alliance for Progress is States, over the next 5 years, is going to was represented as technical assistance, one of the most hopeful parts of this make available to you, as it did in Nibut which was really large sums of money program to support the

amendment; and geria, $225 million.” As was pointed out used to buy equipment that actually I hope the Senate will adopt it.

in the justification which I made a part represented capital investment. That is Mr. ELLENDER. Will the Senator

Will the Senator of the RECORD some time ago, half of that where I tried to draw the line. from Idaho yield further?

$225 million will be in the nature of Take the case of Nigeria, where the Mr. CHURCH. I am glad to yield. grants and the other half will be in the British own and control-lock, stock, and Mr. ELLENDER. I should like to nature of loans. I presume those loans barrel—the main resources of that area. comment further on that part of the will be the “soft” ones, at an interest rate Someone from the State Department Senator's statement which refers to 72 of three-quarters of 1 percent, with 10 agreed, without consulting Congress, to percent of the aid money to the 15 coun years' grace and 40 years to pay. We give to the Nigerians over the next 5 tries he mentioned coming from France. might as well give the money to them. years $225 million. Much of this was Is that a correct statement?

Mr. CHURCH. This matter of financto be in the nature of grants and the Mr. CHURCH. Yes; that is a correct ing very large projects in given countries rest easy loans. I wonder if the Sena- statement from France and from the has become increasingly troublesome to tor from Idaho is in accord with such an United Kingdom.

the Senate Foreign Relations Committee.

There has been a growing feeling in the moneychangers,” never gets less than 2 ferred. If we dish out vast sums to committee that these projects are of percent on any long-term credit it ex countries that make no effort to stop questionable value to the United States tends abroad.

waste and inflation, to provide adin relation to the cost of the projects. Mr. ELLENDER. Two and one-half

Two and one-half equate taxation, to make needed land This led the distinguished Senator percent.

reform, we will discourage those other from Tennessee [Mr. GORE], who is now Mr. CHURCH. I think this is a step in governments that are doing it. in the Chamber, to propose an amend the right direction. The Senator from On the matter of interest on loans, ment that I believe would be a first step Ohio [Mr. LAUSCHE], who proposed the it is obvious, as the Senator has pointed toward correcting this problem. It amendment, is to be commended for out, that the judgment of our adminiswould write into the committee's version making this a better bill.

trators in granting such loans has been of the bill a provision to establish a $100 Mr. GRUENING. Mr. President, will very poor. I was present in Cairo last million ceiling on the American contri- the Senator yield?

February at the signing of the $30 milbution to any project in any given coun Mr. CHURCH. I yield to the Senator lion loan to build a powerplant in west try without the project first coming to from Alaska.

Cairo. A powerplant is a revenue prothe Congress for its specific consent and Mr. GRUENING. I commend

commend the ducing enterprise. It will be paying for approval. This, I believe, is a starting Senator from Idaho for the clarity and itself the day it starts to operate. Yet point in dealing with a problem that is lucidity of his presentation, which is the loan provides for a 10-year moraof increasing concern to the members of characteristic of all of his presentations torium on the interest and principal of the committee. I supported that amend- in the Senate.

the loan, and then three-quarters of 1 ment in the committee, and I wish to I agree very much with what the Sen- percent, with the result that we are not commend the distinguished

the distinguished Senator ator said in the first part of his address, only lending $30 million, but are makfrom Tennessee [Mr. GORE] for its that the purpose of Senators in offering ing a grant of approximately $25 million sponsorship.

amendments is not to injure the foreign at the same time. That is folly. We are I should like to say one other thing aid program, but to strengthen and im- borrowing to make that so-called loan to the Senator from Louisiana, which prove it.

at about a 4-percent interest rate from has to do with the interest rate that I consider foreign aid to be an es- the American people. he mentioned in connection with devel- sential instrument of foreign policy. I Mr. CHURCH. May I interrupt the opment loans.

have long considered it so. I have in- Senator to say that while we extend If we derived any lesson from our ex- creasingly felt that the money should be credit to underwrite the financing of that perience under the Marshall plan- granted to countries that were perform- kind of electrical generating plant in which was probably the most important ing in accordance with principles that Cairo, we require our own electrical genand successful foreign policy venture of were clearly indicated as wise and

and erating plants, financed by the Federal the United States—it was that the bulk proper. The fact that the Senator from Government, to repay on the basis of of the money we gave away should have Idaho has had to work several years to interest which is the equivalent that the been loaned. Had it been loaned, today achieve his amendment to cease aid to United States must pay for its borrowed these amazingly prosperous and produc- countries that as a result of our dollars money. Why the double standard, when tive countries in Western Europe that we had become highly prosperous is an indi we are dealing with a project that, if helped set back on their feet with the cation of the fundamental weakness in it is worthy of the money in the first Marshall plan would be paying the prin- the successive administrations of the place, if it is a sound project, ought to cipal and interest on such loans, and we foreign aid program is that there has fully repay the capital investment, with would not be faced with the critical been desire to spend money regardless of reasonable interest charges? What we balance-of-payments problem that now whether it is useful or not. That has expect of our projects at home we should plagues the Nation. been shown in many cases.

expect of the projects we finance abroad. Drawing on that experience, several The other day I pointed out that I was Mr. GRUENING. I would follow this years ago in the committee the Devel- not in favor of a meat-ax approach, such up by saying that although I believe the opment Loan Fund was established for as the House used in cutting the program committee took a step in the right directhe purpose of changing the emphasis in a half billion dollars, but the program tion in raising the rates to be effective at the foreign aid program away from should be studied country by country. not less than 2 percent, it still has failed grants toward loans, so that this Fund In Western European nations and in Ja- to meet the issue. We will still, while might be used for financing long-term pan, obviously it is not needed any longer receiving 2 percent, have to pay interest economic development in the underde- and has not been for several years. But of 312 or 4 percent. In the future we veloped nations of the world. But in the initiative to suspend it had to come should charge exactly the rates which setting it up, we gave a certain area of from Congress and not from the agency. the American people have to pay for the discretion to the administrators because certain other countries, such as Brazil, money. That is only commonsense. of the great differences between the are not complying with sound fiscal pol We have now made, at this soft rate countries to be dealt with. We thought icies. We have tried to induce its rulers of three-quarters of 1 percent, and 10the discretion would be exercised in such to stop inflation and adopt certain re year moratorium, $1,300 million worth of a way as to preserve the loan character forms. Brazil is not doing so. The con- loans. We shall have to give $870 milof the program. Instead, the great bulk sequence is that we have vainly poured lion in concealed grants on those loans. of the funds, as the Senator has sug- $212 billion into a country that is as it is difficult to justify that we should gested, has been loaned for 40-year pe- rich in resources of all kinds as the mind do so. riods, with a long grace period in which could imagine. There is no reason why One further point. I was much no principal is repaid, following which it should not be prosperous. It has as

It has as shocked to learn that the United States there is repayment at an interest rate many resources as we have in the United is now planning a military aid program of three-fourths of 1 percent on money States. It has gold, strategic minerals, for African countries. I could not more which has cost us, or is costing us, 3 or unlimited water for hydroelectric de- completely agree with the forthright 312 percent to borrow.

velopment, tropical agriculture, temper- condemnation of that program by the So instead of giving money away and ate agriculture. It should be one of the Senator from Idaho. I hope, feeling as calling it a gift, we are now giving money most prosperous nations on earth. But he does, that he will introduce an amendaway and calling it a loan—the worst of it does not have prosperity because it ment that would prevent such aid. There both possible words.

does not adopt essential reforms. Unless is an escape clause in all such amendAgain, this year, the committee has and until it makes such reforms, it will ments that if the President finds it is addressed itself to this problem. A good not be strengthened by our foreign as- in the national interest to do so, in a step has been taken in the committee sistance program. Not only would we given country, he can do it. I have an to shorten the loan period somewhat, be saving money, but, far more impor- amendment which is intended to elimiand to provide that when interest be- tant, we would be giving, by such action, nate our military aid to Latin America, gins to accrue on the loan, it shall be at an example to the other countries that with the same escape clause, because not less than 2 percent.

are trying to conform to the principles such aid has proved to be destructive, I point out that the Soviet Union, of Punta del Este—the very principles not constructive. . It has never strengthwhich likes to castigate “Wall Street to which President Kennedy has re- ened the defense of countries in the

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