vehicles. More than 4,000 reservations are already booked for next season. Many of the passengers have been motoring tourists who embarked at Prince Rupert, left their ships at Ketchikan, Wrangell, Petersburg, Sitka, and Juneau for overnight stops, then drove into the interior of Alaska from Haines, about 80 miles north of this capital city.

BUSINESS IS BENEFITED

However, Mr. President, beginning immediately after statehood, and in full realization of the discrimination and handicap under which Alaska had suffered as a result of her exclusion from the benefits of Federal highway legislation, Governor Eagan proposed, and the Alaska Legislature passed, a proposal for a $23 million bond issue to create what is called, in Alaska, the Marine Highway. The Marine Highway consists of large ferries, which carry approximately 110 automobiles and go from Prince Rupert, in British Columbia, at a point just south of the southernmost part of Alaska, up the inside passage, which is famed for its magnificent scenery, stop-loop trip this first season. They have driven ping at Ketchikan, Wrangell, Petersburg, Sitka, Juneau, and on to Haines and Skagway-a distance of approximately 300 miles.

The bond issue proposal was submitted to the people of Alaska and was approved by them, and the necessary legislation was then enacted. As a result, beginning last January, service on the new Marine Highway began. It has been a tremendous success. Thousands of passengers and automobiles and trucks have been carried on it, although there was little advertising outside of Alaska to make this new means of transportation widely known, and the prospect for next year is even better, now that every voyager has become an enthusiastic supporter of this new route.

This development was made without any Federal assistance. Alaska, after having been denied for 40 years any Federal highway assistance, and although still not included in the Federal Interstate System, made this most important development entirely on its own.

Mr. President, recently a very good account of this development was written by Lawrence E. Davies, west coast correspondent of the New York Times, and was published in the New York Times western edition on November 2, 1963. The article is entitled "Marine Highway to Alaska Booms-Ferry System Spurs Tourism and Aids the Economy." I ask unanimous consent that the article be printed at this point in the RECORD.

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

MARINE HIGHWAY TO ALASKA BOOMS-FERRY SYSTEM SPURS TOURISM AND AIDS THE ECONOMY

(By Lawrence E. Davies) JUNEAU, ALASKA, November 1.-Elated officials are reporting outstanding success for Alaska's new marine highway on which the State is banking heavily for its economic future.

Traffic carried by three ferryships operating between Prince Rupert, British Columbia, and southeast Alaska cities and towns is now

equaling the total projected for the ferry system's fourth year of operation-that is, for 1966.

The system made its debut late in January with one ship, the Malaspina, named for Alaska's largest glacier. Since then two sister vessels, the Taku and the Matanuska, each 353 feet long and cruising at 21 miles an hour, have been added to the fleet. They, too, are named for scenic glaciers of the State.

From January through September 30 the ships carried 74,603 passengers and 14,042

All along the route, according to Gov. William A. Egan and his commissioner of public works, Richard Downing, hotels, motels, restaurants, and retail businesses felt the effect.

The ferryship route follows the scenic Inside Passage 450 miles from Prince Rupert to Skagway. Motorists usually have taken a

from Haines to Anchorage, Fairbanks, or other cities, then returned home by way of the Alaska Highway. Or they went north by that road and returned by ferryship to Prince Rupert and connecting highways.

Now the system is facing its winter test. Business, as expected, has fallen drastically. Instead of carrying up to 350 passengers and 155 vehicles, as was frequently the case in the May-through-August period, the Malaspina last weekend fought through high wintry waves and fog with only 22 passengers, 3 automobiles, a trailer, and a tractor.

A 40-mile wind kept the vessel waiting off Ketchikan until daybreak before it could put into the dock on its southbound trip. Then, on the way north, rough seas in a 21-mile-long unprotected Pacific Ocean section of the route in Dixon Entrance gave passengers a bonus experience.

SOFAS TOSSED ABOUT

Two hundred-pound sofas skidded on lounge floors. Suitcases and tables played musical chairs in staterooms and dinner was delayed until table settings could be placed with some placed with some assurance of stability. The following morning, because of dense fog, the Malaspina lay anchored 41⁄2 hours in Wrangell narrows, a 250-foot-wide stretch with sharp channel turns. Capt. Herbert E. Storey, Jr., the ship's 38-year-old, Colorado-born master, pronounced this the roughest trip of the year and he said that others might be expected during the winter. Once the fog lifted, however, passengers exclaimed over the majestic scenery between the fishing town of Petersburg and Juneau.

"We're making money in summer and operating in the red in winter," Captain Storey remarked, "but as time goes on and trucking picks up this will be a paying op

eration in winter as well."

Only last week the Ottawa government announced that Canada would keep open on a trial basis this winter its stretch of the Haines Cutoff, a road connecting Haines with the Alaska Highway. This will enable trucks to use the marine highway all winter and to proceed then from Haines to interior Alaska cities. About 46 miles of road is involved in the Canadian plan.

RATES ARE REDUCED

Some sawmill owners are beginning to use the ferry ships to ferry lumber to Haines and the interior. C. Girard Davidson, former Democratic national committeeman of Ore

gon, who has moved to Wrangell as president of a new lumber company, the Alaska-Pacific, said at Petersburg:

"We think we can get kiln-dry lumber into Anchorage and Fairbanks much more cheaply this way than by sending it to Whittier by water and loading it aboard railroad cars."

In a further move to build winter business, the ferry system is reducing rates through March from $152.50 an automobile and driver between Prince Rupert and Skagway to $99.

Each of the ferry ships is to have its stateroom bunks increased this winter by the Lake Union Drydock Co. of Seattle from the present 28 to 88 in response to the first year's demand. This is costing $290,000, to be added to the system's $15 million outlay, of which $4.5 million each was paid for construction of the ships.

A $2.6 million vessel, 270 feet long, to accommodate 240 passengers and 40 vehicles is being built by the Christy Corp. of Sturgeon Bay, Wis., for a loop run between Homer, Kodiak, Seward and probably Anchorage, in south central Alaska. This is scheduled for service late next July.

SALE OF WHEAT TO RUSSIA, AND SAVINGS IN STORAGE, TRANSPORTATION, AND HANDLING COSTS

Mr. MILLER. Mr. President, on October 15, the Wall Street Journal and the Washington Post, among other newspapers, quoted Secretary of Agriculture Orville Freeman as saying the sale of 150 to 200 million bushels of wheat to the Soviet Union would save U.S. taxpayers about $200 million in storage and other costs. The Journal, in addition, noted:

He [Freeman] didn't break down this estimate, but the Agricultural Department has estimated the savings in storage, transportation, and handling costs would total $225 million during the current fiscal year and $30 million in fiscal 1965.

Since Mr. Freeman appeared to be very positive in quoting the $200 million savings, I wrote him, on October 15, a letter in which I asked for a breakdown of this amount, to show exactly where the savings would be effected. I also asked him to reconcile, in that breakdown, this $200 million figure with the Commodity Credit Corporation's "Report of Financial Condition and Operations," as of June 30, 1963. This report notes that for all-and I emphasize the word "all"-commodities in the price-support program, program, storage and handling expenses totaled $377 million, and transportation expenses totaled $170 million. These costs covered the more than 2 billion bushels of all types of grains, including wheat, plus other pricesupport commodities. In addition, I pointed out that the report showed that storage, handling, and transportation costs of the 1,082,464,091 bushels of wheat in price support totaled $201,498,448.61 during the last fiscal year. light of these figures, I sought information as to how it was possible that a reduction of a mere 150 million bushelsout of more than 1 billion-would lower costs by $200 million, when the total expense for all wheat was $201,498,448.61.

In

On October 24, a letter was written to me by a J. J. Somers, identified as Director of the Fiscal Division, Agricultural Stabilization and Conservation Service, U.S. Department of Agriculture.

Mr. Somers wrote:

This refers to your letter of October 15, 1963, wherein you requested information on the savings in reduced storage expense and other costs that would accrue from a sale of 150 million bushels of wheat to the Soviet Union. We shall assemble the information requested and forward it at an early date.

In other words, the figures on which Mr. Freeman stood apparently were somewhat shaky since his Department had not even collected the material to back up his statement.

Mr. President, we have heard much of the tendency to manage news in Washington and the inclination of officials to fit the facts to the picture the administration is painting in support of a policy of the moment. This appears to be another indication of that policy. If there will be an actual savings of $200 million, based on substance and not mere speculation, then the public should be entitled to know where this savings would show up. And the public should hold the administration to these figures, expecting a savings to show up in reduction of the Federal budget expenditures. But if the facts are not correct and were pulled out of the air to win support for a policy, then the public should be told why the picture was painted in brilliant colors, when it should have been a blackand-white sketch.

I ask unanimous consent that the letter to Mr. Freeman, dated October 15, the letter from Mr. Somers, dated October 24, the Wall Street Journal, article entitled "Freeman Says Russian Wheat Output Was Off About 27 Percent This Year," and the Washington Post article entitled "Wheat Deal Is Defended by Freeman," be printed at this point in the RECORD.

There being no objection, the letters and articles were ordered to be printed in the RECORD, as follows:

Hon. ORVILLE FREEMAN, Secretary of Agriculture, Department of Agriculture, Washington, D.C.

OCTOBER 15, 1963.

DEAR MR. SECRETARY: Recent news reports have quoted you as declaring that a $200 million savings would result from the reduced storage expenses and other costs that would accrue from a sale of 150 million bushels of wheat to the Soviet Union and the satellite bloc.

Could you please advise how this savings can be reconciled with the cost as outlined in the Commodity Credit Corporation's "Report of Financial Condition and Operations," as of June 30, 1963. I would like to direct your attention to exhibit B under the section entitled "financial statements." This exhibit indicates that, for all the commodities in the price support program, storage and handling expenses totaled $377,280,950.10 and transportation expenses totaled $170,114,250.36. Applying this to wheat in price support as of that period, schedule 17 under "inventory operations" shows that inventory carrying charges, including storage and handling expense and transportation expense, amounted to $201,498,448.61. Schedule 6 under "pro

gram results" provides additional data to indicate that wheat storage and handling expense amounted to $144,905,193.50 and transportation expense totaled $56,593,255.11, the sum total of which adds up to the $201,498,448.61 for inventory carrying charges. In light of the fact that items in the price support inventory of the CCC as of June 30 included not only 1,082,464,091 bushels of wheat but an equal amount of other grains plus other commodities-resulting in total storage and handling expenses of $377,280,950.10 and transportation expenses of $170,114,250.36-how is it possible that a reduction of only 150 million bushels would lower costs by $200 million as you indicated in your public statements?

It would be appreciated if I could be furnished with a breakdown of where this savings would occur and how this fits in with the overall picture as set out above. Sincerely,

[From the Wall Street Journal, Oct. 14, 1963] FREEMAN SAYS RUSSIAN WHEAT OUTPUT WAS OFF ABOUT 27 PERCENT THIS YEAR-HE ESTIMATES PRODUCTION DROPPED TO 40 MILLION TONS; DEFENDS U.S. SALE AGAINST NIXON CHARGE

WASHINGTON.-Secretary of Agriculture Freeman estimated that Soviet wheat production dropped to 40 million tons this year, down 15 million tons, or 27 percent from recent years.

Mr. Freeman, interviewed on ABC's "Issues and Answers" radio and television program, also predicted sales to the drought-stricken Communist nations may boost U.S. wheat exports to 1 billion bushels this year.

"We will sell in a normal year about 650 to 750 million bushels of wheat," he said. "This will be another 150 to 200 million bushels *** but it may be 20 percent more," he added.

The Secretary said that “in all likelihood" a Soviet delegation will come to Washington in the next week or 10 days to discuss terms.

DEFENDS PROPOSED SALES

Mr. Freeman strongly defended the proposed wheat sales. In reference to former Vice President Richard Nixon's charge that the decision to sell may be the administration's "major foreign policy mistake *** to date" he said: "A little bit ridiculous *** it is almost like a candidate desperately trying to think up something to say to get on the front page."

The Secretary said that on his recent swing through U.S. wheat States he found about 90-to-1 approval of the sales to Communist nations.

The decision to sell wasn't a political one, he said, and while it will strengthen wheat prices and farmer income this year it isn't likely to do so next year when the Presidential election is held.

SAVINGS TO U.S. TAXPAYER

A sale of 150 to 200 million bushels of wheat to the Soviet Union would save U.S. taxpayers about $200 million in storage and other costs, he said. He didn't break down this estimate but the Agriculture Department has estimated the savings in storage, transportation and handling costs would total $225 million during the current fiscal year and $30 million in fiscal 1965.

The charge that we would in effect be paying the usual 60-cent-a-bushel wheat export subsidy to Russia is totally fallacious, Mr. Freeman said. The wheat to be shipped to the Soviets will come from surplus stocks, he said. "The difference between world price and domestic price has long since been paid to the American farmer," he added.

The Secretary also made these points: The Soviet Union may spend up to $1 billion for wheat this year, and the United States has been selling about $5 to $6 million annually of mostly tallow, hides, and skins to the Soviet Union for the past 30 years.

[From the Washington (D.C.) Post, Oct. 15,

1963]

WHEAT DEAL IS DEFENDED BY FREEMANAGRICULTURE CHIEF EXPECTS TAXPAYERS TO SAVE $200 MILLION

(By Arch Parsons)

Secretary of Agriculture Orville Freeman defended the administration yesterday against Republican attacks upon President Kennedy's approval of wheat sales to the Soviet Union, asserting that the deal with the Russians will save American taxpayers some $200 million.

Freeman said that his personal tour of the farm States found people there "about 90 to 1" in favor of the President's decision.

He also commented on former Vice President Richard M. Nixon's charge that the President's approval of the wheat sale was "the major foreign policy mistake of this administration to date, even more serious than fouling up the Bay of Pigs."

Freeman replied that Nixon's comment was "a little bit ridiculous," adding: "It is almost like a candidate for public office in the middle of the campaign desperately trying to think up something to say to get on the front page."

Nixon denied on Saturday that he would be a candidate for the Presidency next year.

Next, Freeman took on charges by Senator BARRY GOLDWATER, Republican of Arizona, that the administration's intelligence services were lax in obtaining sufficient prior knowledge of the Soviet wheat shortage and that President Kennedy should have sought Soviet concessions on such matters as Berlin in exchange for the wheat.

DOWN 27 PERCENT

Interviewed on the television program "Issues and Answers" (WMAL-ABC), Freeman said that when he talked with Soviet Premier Nikita Khrushchev in July, he got the impression that the Communist leader himself "did not realize the extent of the grain shortage." The Secretary estimated that because of bad weather this year throughout Europe, the Soviet wheat crop would be down 15 million tons, or 27 percent from recent years.

"To have sought political concessions from Khrushchev," he said, would have been "a deterrent toward the strengthening and the improving of relationships that were believed to be desirable."

Trade in "nonstrategic items," Freeman declared, is one of the ways in which the United States can "maximize our relationship," "bring about a relaxation of tension" and "maintain a peaceful world."

BEST ILLUSTRATION

The Secretary called the pending wheat sale "the best, most vivid and dramatic illustration of the success of the family farm, free enterprise agriculture as compared with the collective agriculture of the Soviet Union."

Freeman said the $200 million savings would result from the reduced storage expenses and other costs that would accrue from a sale of 150 million bushels of wheat.

Some of the wheat probably will go via the Soviet Union to the Communist satellite nations in Europe, he said, but he doubted whether the deal would enable the Soviet Union to send some of its own wheat to Cuba or Communist China.

As for the United States selling wheat directly to these two countries, Freeman said wryly that it would be the last thing they would want from "this big, bad, capitalistic Nation of ours."

DOMINICAN REPUBLIC POLIO

PROJECT CONTINUES

Mr. JAVITS. Mr. President, on August 27 I reported to the Senate on an extraordinary humanitarian effort to meet the threat of a grave polio epidemic in the Dominican Republic.

After hearing about the polio threat from Mrs. Juan Bosch, wife of the then President of the Dominican Republic, I had the honor of arranging this emergency effort, which involved donations by U.S. firms and assistance by private and government agencies. The American Cyanamid Co., acting through its chairman, Dr. Wilbur Malcolm, donated 1,500,000 doses of oral polio vaccine. Juan Trippe, president for Pan American Airways, arranged to airlift the vaccine to Santo Domingo. The Lily-Tulip Cup Corp., acting through its president, Walter Bergman, donated paper cups needed in administering the vaccine. Also cooperating in the effort were the Agency for International Development AID the U.S. Public Health Service, the Ministry of Health of Dominican Republic, the Pan American Health Organization, and the International Rescue Committee. The project was a remarkable demonstration of cooperation between private enterprise and government.

Following the arrival of the vaccine in Santo Domingo and the beginning of the immunization program, I received a letter from our Ambassador to the Dominican Republic, the Honorable John Bartlow Martin, in which he described the impact this effort made on the people of the Dominican Republic.

I can think of no other project-
He wrote-

in my experience here which has better demonstrated the generosity, humanitarianism and initiative of private American citizens.

On September 25, as everyone knows, an Army junta ousted President Juan Bosch and took over in the Dominican Republic. But despite the grave political developments which followed in that country, I am gratified to report to the Senate today that the polio immunization campaign is proceeding as planned. Indeed, in a letter which I have received

from Teodoro Moscoso, U.S. Coordinator for the Alliance for Progress, he informs me that not only is the polio immunization campaign proceeding, but that it has apparently "broken the back" of the epidemic.

I ask unanimous consent that excerpts from Mr. Moscoso's heartening report to me be printed at this point in the RECORD.

The arrival of the polio vaccine donated by the Lederle Laboratories of American Cyanamid accompanied by 1 million cups from the Lily-Tulip Co.-all freely transported by Pan American Airways-received wide publicity in the country. The rising incidence of paralytic polio had begun to cause great fears, especially in the capital city, and there is no doubt that the people reached by the news

of the vaccine's arrival were deeply moved by

this unusual contribution.

We are assured that in spite of recent political events, the immunization campaign is proceeding. We will continue to be in contact with the Pan American Health Organization, which has been overseeing the program since the departure of the Public Health Service experts.

A recent article in El Caribe *** an

nounces the beginning of the second round of immunizations and explains the importance of returning for a second dose. Another article shows that administration of the type II vaccine is underway. The first dosage administered was the type I vaccine, which is considered to have effectively broken the back of the epidemic.

We do not expect any change in or neglect of this important program in the Dominican Republic. Should anything of that kind occur, we will be informed, and in view of your considerable and special interest, we would transmit such information to you.

Mr. JAVITS. Mr. Moscoso's statement that no change or neglect of this program is expected is most reassuring. I know the various U.S. companies and Government agencies involved will feel most encouraged by the fact that this people-to-people humanitarian effort will go on, unaffected by even the gravest political developments.

CBS-EAST SIDE-WEST SIDE SERIES

Mr. JAVITS. Mr. President, the "East Side-West Side" series of the Columbia Broadcasting System last Monday night featured a powerful drama, entitled "Who Do You Kill?" I was privileged to see a preview of this production before I left for the NATO Parliamentarians' Conference, and I was impressed by the courage and the sense of public responsibility of the network and its executives in assuring that this production, the first to employ a predominantly Negro cast since the revival of "Green Pastures," was shown to the public.

But I was distressed to read in the newspapers that this drama was not telecast to audiences in two southern cities. I say this because many people in the South, and with some reason, have charged that northerners have a "holier charged that northerners have a "holier than thou" attitude toward them on racial matters, although racial discrimination is actually both a national as well as a sectional problem. This drama, essentially a love story, dealt honestly and sentially a love story, dealt honestly and

"Who Do You Kill?" was certainly a drama of protest, shocking in its revelations of what life can be like without hope. It showed that the bitterness of a feeling of racial injustice knows no sectional boundaries; that there are no color bars to disaster, suffering, or love. I think this trail-blazing effort on the part of CBS to portray vital issues facing the country in valid dramatic terms should receive the highest commendation. Special praise should go to William Paley, chairman of the CBS board; Dr. Frank Stanton, president of CBS Industries; James Aubrey, president of the CBS Television Network, as well as the author, Arnold Perl; the director, Tom Gries; the producer, Larry Arrick; and David Susskind and Daniel Melnick who presented this drama.

I ask unanimous consent that an arti

cle entitled "A CBS Show Stars Two Negroes: Atlanta Blacks It Out," published in the New York Herald Tribune on November 5, and an article entitled "TV: A Drama of Protest," published in the New York Times of the same date, be printed at this point in the RECORD.

There being no objection, the articles were ordered to be printed in the RECORD, as follows:

[From the New York Herald Tribune, Nov. 5, 1963]

A CBS SHOW STARS Two NEGROES: ATLANTA BLACKS IT OUT

(By Richard K. Doan) Atlanta TV viewers were denied seeing last night's episode of the CBS series, "East Side,

West Side." It starred Diana Sands and James Earl Jones, both Negroes, in a story in which they portrayed a couple living in

a Harlem tenement.

Kenneth Bagwell, general manager of WAGA-TV, the CBS outlet in Atlanta, explained yesterday that the management of the station felt the telecast would be detrimental to good race relations in Atlanta. He said CBS prescreened the episode for affiliated stations late last week via closed circuit.

"We feel this city has made progress in race relations," Bagwell asserted, "and it was our conclusion that this program might well impair that progress."

He contended it would be necessary to see the drama and understand the situation here to appreciate the station's reasons for blacking out the show.

The program also was not shown in Shreveport; but a CBS official said the Louisiana station, KSLA, preempted the "East Side, West Side" time for a local political telecast, not because of the nature of the episode.

The Atlanta blackout was the first known instance so far this season of an entertainment show being barred by a station because of a racial theme.

[From the New York Times, Nov. 5, 1963] TV: A DRAMA OF PROTEST-PREDOMINANTLY NEGRO CAST ENACTS STORY OF FRUSTRATION SET IN HARLEM

(By Jack Gould) Drama of protest, a theme rarely found on television, made an impressive and moving

But the larger narrative, told by Mr. Perl with lean and perceptive understanding, dealt with the erosion of the human spirit that accompanies exploitation of a minority. The damage to dignity that attends unequal employment and unequal education finds release in bitterness. But in the sequel to the accident that befell the couple's daughter Mr. Perl made his telling point: Disaster, suffering, and finally the healing balm of love knows no color line.

"Who Do You Kill?" for all practical purposes was the first television drama to employ a predominantly Negro cast since the revival of "Green Pastures." As the young mother, Diana Sands was extremely touching and heartrending. James Earl Jones, playing the father, was first rebellious and then filled with humility; it was a portrayal of dimension. Tom Gries did the superb direction, and the camerawork of Jack Jriestley was an editorial in itself on Harlem living conditions.

THE CONTRIBUTION OF THE U.S. OIL INDUSTRY TO THE U.S. BALANCE

OF PAYMENTS

Mr. JAVITS. Mr. President, I recently received a copy of a study on "The Contribution of the U.S. Oil Industry to the U.S. Balance of Payments," which I feel is most enlightening and would be of interest to my colleagues.

The study is of particular significance in light of the administration's proposal to place a tax on U.S. capital outflows. It is apparent from the data contained in this study that while U.S. foreign investment represents an outflow of U.S. funds in the first instance, subsequent income from such investments overseas results in major revenues for the United States.

The study points out that the foreign activities of some 200 U.S. companies engaged in international oil operations produced a net inflow of more than $638 million in 1962-a figure sufficient enough to substantially affect our balance of payments. This inflow is the result of several elements: First, profits returned to the United States; second, exports of petroleum and refined products, equipment, and supplies for the operation and expansion of U.S. oil companies; third, purchases made by foreign governments and business firms made possible as the result of the income received from the U.S. companies; and fourth, proceeds from exports of oilbased chemicals.

This substantial contribution to our balance of payments by the foreign activities of U.S. oil companies serves to indicate that great caution must be exercised in considering proposals which would in any way slow up this inflow. In weighing the balance-of-payments effects of such proposals as the interest

equalization tax-a tax designed to restrict the outflow of U.S. capital-we should look at the effect on our balance

of payments of the substantial contribution of the oil industry to the plus side of our payments ledger.

I ask unanimous consent that the report to which I have referred be printed at this point in the RECORD.

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

THE CONTRIBUTION OF THE U.S. OIL INDUSTRY TO THE U.S. BALANCE OF PAYMENTS In view of continuing national concern about the deficit in the U.S. balance of payments, the Standard Oil Co. (New Jersey) has made a study of the payments impact of international oil trade by U.S. companies. It is hoped that the new data will provide a useful factual basis for public policy.

The survey shows that the foreign activities of some 200 U.S. companies engaged in international oil operations produced a net inflow to the United States of more than $638 million in 1962.

There was a net payments surplus in each of the last 5 years; and the trend has been upward. The favorable balance by years was as follows:

Without these favorable balances from the

oil industry, the total U.S. payments deficit during these years would have been substantially greater.

The favorable balances seem likely to continue and increase. This can best be ap

preciated by reference to the fact that free world petroleum demand (outside of the United States) increased from 7.7 million barrels daily in 1958 to 11.6 million barrels daily in 1962, an increase of nearly 50 percent. By 1970 an additional increase of close to 70 percent above the 1962 level is anticipated. The U.S. oil industry, which holds

an equity interest in 60 cercent of proved free world reserves outside the United States plans to continue to participate in this growth.

The impact of U.S. oil company operations on the balance of payments is made up of a number of elements. On the outflow side are U.S. purchases of petroleum from abroad and the flow of capital for investments abroad. On the inflow side are profits returned to the United States, exports of petroleum and refined products, and exports of equipment and supplies for the foreign operations of U.S. oil companies. The breakdown of these items for 1962 in millions of

dollars was as follows:

tive estimating procedures employed. Moreover, data were not available for exports of oil-based chemicals and the proceeds from these exports have not been taken into account.

the

The figures do not include purchases of goods by U.S. oil companies abroad from foreign suppliers who had originally obtained such items from the United States. Nor do the figures include purchases from United States by foreign governments and business firms which were made possible by income they received as a result of U.S. oil companies' operations abroad.

Several aspects of the figures are worthy of emphasis:

1. The earnings remitted from the foreign operations of U.S. oil companies in 1962 amounted to $1,578 million, an increase of nearly 50 percent over 1958. For the 1958-62 period, profits sent back to the United States amounted to $6,293 million. This represents a very substantial contribution to the U.S. economy.

2. The inflow of income from abroad far exceeds the annual outflow of funds for additional investments. For 1962, the excess of returned earnings over new investment was $1,040 million. The excess of earnings inflow over investment outflow for the 5-year period amounted to $3,930 million. It may be anticipated that in the future the companies operating abroad will continue to undertake substantial plant and equipment expansions, but increasingly expenditures for these purposes will be financed from retained earnings and depreciation funds.

3. While net oil imports have risen about 22 percent over the past 5 years, the net payments surplus from oil industry activities has increased about 240 percent.

The substantial contribution to our balance of payments by the foreign activities of U.S. oil companies clearly indicates that

great caution should be exercised in considering proposals which would impair these operations. In recent months, however, with the stated purpose of helping to reduce the payments deficit, a number of steps have been advocated which would in reality make little or no contribution to this desirable

objective, while impeding foreign operations of U.S. oil companies and in other ways adversely affecting important national interests. For example, suggestions have been made to restrict the outflow of petroleum investment by discriminatory taxes. If adopted, such restrictions would have the effect of depriving our future balance of payments of the large net inflow of earnings which such investments generate. Similarly, balance-of-payments arguments have been used to urge further restrictions on petroleum imports, which already strictly limited. These measures overlook the interrelationship between imports and exports and other credits in payments computations. They also overlook the contribution of imports to developing nations and to lower prices for American consumers.

are

It has also been suggested that U.S. military forces around the world should be denied ready access to nearby sources of petroleum products and should be required to purchase and ship these products from the United States. This measure would have little significant impact on the balance of payments because many of these purchases are paid for in dollars which never leave the United States; and a substantial portion of these purchases involves military needs which could not be satisfied by supplies from the United States. Moreover, the proposed restriction would increase costs to the military forces and reduce their mobility and effectiveness. It would also impair economic advancement and weaken support

NEGOTIATIONS ON NONTARIFF

BARRIERS NEEDED

Mr. JAVITS. Mr. President, I wish to call to the attention of the Senate the Seventh Annual Report of the President

on

the Trade Agreements Program which was recently transmitted to the Congress.

This report summarizes the progress that has been made in the field of liberalizing world trade in 1962 under the Trade Agreements Extension Act of 1958 and the Trade Expansion Act of 1962.

These nontariff barriers inhibit trade as much as high tariffs. We acted on the question in the NATO Parliamentarians Conference in Paris, on which I shall report to the Senate next week. In the meantime, I call attention to the need for undertaking negotiations in the countries of a general agreement on tariffs and trade.

I wish to call attention particularly to the chapter entitled "Nontariff Restrictions Upon Trade," a subject which was discussed during the 20th session of the contracting parties to the GATT and which I will again be the subject for negotiations at the forthcoming session of the GATT in Geneva.

I believe the elimination of nontariff barriers should be a primary task of the forthcoming talks, since the need for many of the nontariff restrictions imposed during the postwar year for balance-of-payments reasons have now disappeared. Yet such restrictions still constitute a significant impediment to the expansion of world trade.

types of European restrictions; internal taxes on top of high tariffs; high costtaxes on top of high tariffs; high costbase methods of calculating ad valorem duties and taxes; and, discriminatory duties and taxes; and, discriminatory regulations against marketing, packing regulations against marketing, packing and advertising form the basis for most and advertising form the basis for most of the U.S. complaints.

I believe that the United States could make a major contribution to liberalizing world trade during the forthcoming GATT negotiations by serious negotiation on nontariff barriers.

I ask unanimous consent that the chapter entitled "Nontariff Restrictions Upon Trade" be printed in the RECORD at the conclusion of my remarks.

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

[From the Seventh Annual Report on the Trade Agreements Program, message from the President of the United States to the Congress, Oct. 21, 1963]

IV. NONTARIFF RESTRICTIONS UPON TRADE A. BALANCE-OF-PAYMENTS RESTRICTIONS 1. General

The GATT contains a broad prohibition against the use of quotas, licensing requirements, and other quantitative (nontariff) restrictions on imports. It recognizes, howrestrictions on imports. It recognizes, however, that a contracting party may be justified in the use of such restrictions when its monetary reserves are very low or when it is faced with an imminent threat of a serious decline in its reserves.

All contracting parties maintaining restrictions to safeguard their external financial positions are required to consult with the contracting parties periodically (annu

ally for developed countries; biennially for less developed countries). Furthermore, a contracting party that institutes new restrictions or substantially intensifies existing restrictions is required to consult with the contracting parties soon thereafter, or, if possible, beforehand.

The consultations deal with the balanceof-payments position and prospects of the consulting country, alternative measures to restore equilibrium, the system of restrictions in force and the methods used in administering them, and the effects of the restrictions. Full consideration is also given to the nature, effects, and reasons for any discrimination in the administration of the import restrictions.

2. Reports on consultations

The contracting parties adopted reports on consultations held during 1962 with 13 countries (Brazil, Ceylon, Denmark, Finland, Ghana, Greece, India, Israel, Japan, New Zealand, Pakistan, South Africa, and Uruguay) which impose import restrictions under either article XII or article XVIII:B to protect their balance of payments.

During the consultations, which were conducted by the Committee on Balance of Payments Restrictions, the U.S. representatives continued their efforts to encourage the consulting countries to relax and eliminate their restrictions as rapidly as possible and to insure that, where restrictions were still considered necessary, they did not discriminate against American goods. The U.S. representatives also urged, in appropriate cases, that the consulting countries, when relaxing restrictions, avoid the adoption of measures such as increased customs duties and new internal taxes bearing heavily on imports which, whether or not consistent with GATT, have the effect of offsetting the benefits to be expected from liberalization.

In the consultation with Japan, the United tial progress which Japan had made in the States representatives welcomed the substanpast year in relaxing import restrictions, but noted that a wide range of goods of interest to American exporters remained subject to control and urged Japan, in view of its steadily improving balance of payments and reserve position, to make further rapid progress in eliminating the remaining restrictions. South Africa, which traditionally has a surplus on current transactions and which has experienced a remarkable increase in its gold and foreign exchange reserves since curbing capital outflows in June 1961, was pressed hard for prompt and substantial liberalization. New Zealand, which intensified its restrictions substantially in 1961 following a sharp deterioration in its reserve posi

tion, has again begun to relax its restrictions and was encouraged to continue to do so. Denmark and Finland were urged to continue the steady progress they have been making in recent years in removing their relatively few remaining restrictions.

The U.S. representatives commended Israel for the steps it had taken to simplify its exchange system and relax restrictions on imports and pressed for further liberalization.

In the consultations with Brazil, Ceylon, Ghana, Greece, India, Pakistan, and Uruguay, the U.S. representatives took note of the special problems which those countries faced in pursuing their programs of economic development. They stressed, however, the disadvantages which a heavy burden of restrictions entailed for both importing and exporting countries and urged the consulting countries to reduce their reliance on restrictions to the greatest extent possible. U.S. representatives raised with Brazil and Uruguay the question of the discrimination against American exports which results when those countries exempt imports from other