But in practice, Government paper shufflers have never gotten around to handling the required registrations. For more than a year, remittances-not just profits but interest on loans and even patent license payments-have been held near zero. This tourniquet has cut off a normal outward flow of roughly $100 million annually.

U.S. POLICY DILEMMA

American policymakers, whether they sit in Washington offices or corporate board rooms, thus face a dilemma. Should they refuse to be bled any longer, and flatly decline to throw good money after bad? Or should they figure they're so badly hooked already that, to protect their investment, they must play along-calculating that Brazil's current course reflects neither the true interests nor the popular will of this great nation, hoping things will change for the better, and fearful of touching off a change for the worse? They find it a tough decision.

To appreciate how tough, look more closely at oil. It's Brazil's biggest import necessity. To ultranationalists here, it symbolizes the nation's struggle with giant foreign "trusts." To the companies concerned, that struggle displays the slashing skill of some of the Brazilian Government's most powerful and radical institutions.

These Government arms include:

Petrobras. This Government oil company monopolizes domestic exploration and production, but fills only a third of the nation's crude oil needs. It does the bulk of all refining. Under Mr. Goulart, executives who knew petroleum have vanished; the outfit is headed by a political general and run by leftists in key posts. Its costs are swollen by inefficiency, payroll padding and apparently the financing of such unrelated things as youth movements. The Reds would like to switch crude imports over to the Soviet, already a secondary supplier.

COUNCIL AND BANK

Conselho National de Petroleo. It rules over the private sector of the oil industry, regulating retail prices and myriad other matters. This council too is infiltrated by Reds who would like to stamp out capitalism at the filling-station level.

Banco do Brasil. This bank is part of the government financial apparatus which constantly claims to fight inflation while flooding the country with paper money to cover fantastic budget deficits. It also constantly claims to be bringing foreign payments into balance, while rigging exchange rates to subsidize imports and stifle exports.

As for the foreign companies, they play a double role. First, there are the Brazilian subsidiaries of Standard Oil Co. of New Jersey, Texaco, Inc., Atlantic Refining Co., and Shell Oil Co. (Gulf Oil Corp. got out). They buy gasoline and other refined products, mainly from Petrobras. They pay the Government within a required 30 days, and then manage to distribute to the remotest village under tight price ceilings fixed by the Petroleum Council. But now, suddenly, they're not obeying another Government edict.

The council, which has just permitted a price rise of about 30 percent, demands the companies give Banco do Brasil a sum equal to their "windfall" profit on inventories. In effect, the companies, which have already paid the Government once for enormous stocks, are told they must pay for about a third of these all over again. The cash they're asked to hand over comes to roughly 12 billion cruzeiros-more than $10 million and probably close to $20 million, depending on which of the variously rigged Brazilian exchange rates is used to translate the cruzeiro figure.

The distributing companies plead that the level of their stocks has been dictated by a council which will not permit sensible inventory trimming, and that a 30-percent price

boost is no "windfall" but a belated catchup with inflation, which now has Brazilian labor demanding 100-percent wage boosts. Finally, after years of omitted dividends, they say they don't have the money and can't find a banker who will lend it. Having paid similar cash levies in the past the companies don't say they are unwilling to pay, but contend they're unable.

The companies say some high Government officials understand the facts and express sympathy, but they have received no assurances they are being believed. In fact, Government regulators, perhaps figuring parent companies can be pressured into bringing down fresh dollars to ransom these Brazilian subsidiaries, or perhaps with a more political purpose, make this threat: Any company failing to fork over will lose its marketing quota. No quota means the company is out of business.

BUYING TACTICS

The crude oil Brazil imports from Venezuela and the Mideast is supplied mainly by producing or trading affiliates of the same four companies. In buying from them the Government, which is so insistent a collector inside Brazil, becomes an elusive debtor.

The chief purchaser is Petrobras. Though Petrobras demands payment in 30 days when selling, it does not consider a bill due until 4 months have passed when it's buying. Then it does pay.

There's one hitch, though. Payment is made by giving cruzeiros to Banco do Brasil which is supposed then to transmit dollars. The bank has been pocketing the cruzeiros and blandly telling oil suppliers it has no dollars.

Now, oil companies are confronted not merely with the prospect of carrying $100 million of unpaid bills on the cuff, but with a Government request that this embarrassing commercial delinquency be made to vanish for a while by sticking a not-due-tilllater label on it and tossing it into storage. The companies have entered negotiations. Any oil executive tempted to stalk out must consider whether he's really ready to give up this market, occuping half a continent.

A TALK WITH THE BOSS

These oil troubles illustrate the sort of battering most businesses experience if they have dealings with Brazil. Variations are innumerable. But inside Brazil the officers of many a U.S.-owned factory say they have had a "helluva" time with bosses back home, and by now the wrangling frequently evolves around whether more dollars should be brought down. Here's the outline one subsidiary officer gives of a typical conversation with his superior in the United States:

"Why should we send more money in when you fellows can't send profits out?"

"Well, this inflation has doubled the working capital we need, and we can only borrow here at more than 40 percent interest, if we can get it at all."

"You're giving everything away to your Commie union. And even that 70 percent boost 4 months ago isn't keeping them from screaming for more."

"I know, but my guys here are OK, and you should try to understand that the way things are going they really do need more money. Anyhow, we have to give it or be shut down.”

"How's that nationalization bill stand in congress?"

"Still talking about it, but it looks like we'll squeak by with just price ceilings."

"You call this a case for investing stockholders' money?”

"This is still a great country with a chance for a great future, and anybody who chickens out now may be making a great mistake. But give the word and I'll have a padlock on the gate tomorrow."

"Not so fast."

A General Motors or a General Electric is physically anchored to Brazil by its plants. An American exporter may not be, but if he has a valuable traditional share in the Brazilian market for chemicals or curtain rods balance against a batch of unpaid bills, he can't escape the problem of whether and when to take his licking and cut his losses. Even with coffee export prices riding high, one economist says Brazil is like the fellow who overspends and keeps out of bankruptcy by running around paying the mortgage, but stalling the butcher, and fending off repossession of his new car by borrowing an installment payment from a neighbor. The trouble with this comparison is that by 1964 Brazil's balance-of-payments gap is probably going to reach $800 million. So a horde of creditors will find themselves not just in the same boat but in the same ocean liner.

The Kennedy administration will be in it with them. It, too, has a heavy commitment through the Alliance for Progress plan for uplifting the hemisphere with U.S. aid and Latin self-help. Brazil is crucial to the project. So Washington policymakers grant some aid, hold back on some, strive to get what they give to more useful destinations such as Brazilian state governments, and wonder whether and when more drastic decisions must be made.

EXHIBIT 2

[From the Financial Post, Oct. 19, 1963] KENNEDY TO MEANY TO HALL TO BANKS President Kennedy wants to be reelected next year but Canadians don't like being a punching bag in his political warmup.

The American Government is busily engaged in trying to run the affairs of dozens of countries around the world. It wears the robes and halo of sanctity. It is on the side of progress or democracy or freedom or something that sounds good.

Certainly no responsible member of the Western alliance will envy the most powerful nation on earth its responsibilities or deny its generosity or seriously criticize what the Americans stand for in the cold war.

But more and more the habit of pushing other people around is growing on the Kennedys and their clansmen in Washington.

This is frequently and amply demonstrated within the United States. Indeed, terrifying American citizens into behavior pleasing to the Kennedys is currently the political sport of the President's brother, the Attorney General.

Quite a few people and corporations who do not please the Kennedys are now finding that their current and past income tax returns are being reviewed.

And who is there who won't be intimidated by that, even if their income reports are all clean as a whistle? This Attorney General discipline is so intimidating, in fact, that U.S. news media don't write about it.

Now, with their bullying strategy perfected at home, the Kennedys and their cohorts are using it to get what they want abroad.

Take the latest example of outrageous interference-the American pressure against the Canadian Government over the labor union war on the Great Lakes. the Belatedly, Canadian Government stepped into this mess and the trustee scheme is about to be implemented.

But the spectacle of the White House and the U.S. Secretary of Labor and the whole weighty machinery of the U.S. Government being gassed up to tell the Canadian Government what it can and cannot do about a Canadian problem is, to say the least, unpleasant.

ALLIANCE, YES; HOLY, NO

Here is the cast of characters and here is the play.

Kennedy needs the labor union vote in his presidential contest next year. That means he needs the unqualified support of George Meany, the powerful head of the AFL-CIO.

Meany is shaky in his lucrative job. Quite a few big union leaders are gunning for him, notably Walter Reuther of the Auto Workers.

To protect his hide, Meany needs all the friends he can keep and so he will do anything to please Paul Hall, the very powerful international boss of the Seafarers Union.

Paul Hall, in turn, very much needs the support of Hal Banks-and the money Banks gets out of his Canadian union members.

So when the U.S. Secretary of Labor solemnly makes an official pilgrimage to Ottawa (nobody can recall that happening before) and when he makes public declarations telling the Canadian Government what to do, he is merely doing a chore for Kennedy who wants to do a favor for George Meany, who needs Hall, who needs the notorious Hal Banks.

From Mr. Kennedy's point of view, Canada is quite unimportant. It would, in most respects, be a lot simpler for the White House and the U.S. Government if we didn't exist at all as a separate country.

It is tragic that a man of such great endowments as Kennedy should, with increasing frequency, be revealed as having a serious defect of character. His intellect

and conscience too often fail him in assessment of the appropriate and seemly exercise of power.

The proverb, "The end justifies the means" with the Kennedy clan too often becomes "The end justifies any means."

Hal Banks and John F. Kennedy will understand each other completely. As "successful" men, they have good reason to admire each other.

Both Banks and Kennedy are good at kicking people around. Canadians who have not taken the oath of allegiance to the White House and to the U.S. Congress have very good cause for extreme distaste.

TRUTH IN LENDING

Mr. SIMPSON. Mr. President, the next public hearing on the so-called truth-in-lending bill will be held at the end of the third week in November. In the meantime, the battle over the issues of the deceptively labeled measure is continuing on the Senate floor.

My colleague from Illinois, Senator DOUGLAS, has inserted several items in the RECORD of late. So that the official document of these proceedings shall not be overburdened with but a single viewpoint on this important matter, I should like to place in the RECORD a news dispatch from the October 23 Washington Post.

The article points out that, Joseph Valachi notwithstanding, credit transactions in responsible retail establishments are not exorbitant and usurious as some protagonists of the truth-in-lending bill have alleged. As the story explains:

A check of Washington department stores *** turned up none that charged as much as 3 percent. Most charged 12, and one charged a 3-percent service charge at the time of purchase-but no interest thereafter.

I imply no inference to the senior Senator from Oregon in discussing this article although the story does make allusions to a statement by the Senator. I call attention to the article so that the RECORD Will not imply an indictment of Washington's department stores, whose credit service charges are completely in line with the norms of revolving credit transactions.

I ask unanimous consent, Mr. President, that the story be printed in the RECORD.

There being no objection, the article was ordered to be printed in the RECORD, as follows: MORSE AMENDS ATTACK ON STORE INTEREST RATES

Senator WAYNE MORSE, Democrat, of Oregon, has corrected his charge that an unnamed Washington department store collects 6 percent interest a month on unpaid accounts.

The figure, MORSE told his colleagues, was only 3 percent-or 36 percent a year. He

said the mistake arose when he misunderstood his wife's complaints about a charge account she had just canceled.

As other Senators were talking about Gangster Joseph Valachi's loan-sharking activities in Cosa Nostra, Senator PAUL H. DOUGLAS, Democrat, of Illinois, put in a plug for his own "truth in lending" bill.

MORSE then told of his wife's experience with 6-percent interest rates. The next day he corrected the figure to 3 percent, and added that many stores had taken to charg

ing only 12 percent on the unpaid balance.

A check of Washington department stores yesterday turned up none that charged as much as 3 percent. Most charged 12, and one charged a 3-percent service charge at the time of purchase-but no interest thereafter.

VETERANS DAY

Mr. SALTONSTALL. Mr. President, throughout the history of our Nation, each generation has been compelled to bear witness to its dedication to the ideals of freedom and peace. Whenever necessary, this commitment has been heroically defended on battlefields around the world. We can never repay our veterans for the hardships they endured and the sacrifices they made during these struggles. However, in recognition of this debt, and as a symbol of our heartfelt gratitude, we observe November 11 as Veterans Day.

Perhaps the most meaningful way in which we can honor these men and women is by reaffirming our dedication to the ideals for which they fought. By meeting firmly the challenge to access to Berlin or the attempts of Castro to spread communism within the Western Hemisphere we are demonstrating our determination to resist encroachments upon fundamental freedoms. By holding out hope and encouragement to those people who today are denied the freedom of choice and initiative which is rightly theirs, and by seeking to create the conditions by which they may join the community of independent, self-governing nations we work toward a fundamental principle of our way of life, that of justice for all.

In resisting Communist harassment and subversion while pursuing the paths of peace, we will be paying the finest tribute possible to our veterans.

Thus, on November 11, as we visit the graves of our heroic veterans and salute those who fought in the forces of freedom, let us also reaffirm our dedication to the task at hand. We are challenged by necessity and by deep conviction to work tirelessly for a world order in which there will be no wars or threat of wars.

Veterans Day, then, is a day in which we remember with pride the courage, devotion, and sacrifice of those who have served our country in time of war. It is a day for us to be glad we are Americans and to proclaim our belief in the principles which have guided our Nation. It is a day, too, when we reaffirm our determination to continue the struggle to bring lasting peace to the world.

INVESTMENT FOR THE FUTURE

Mr. BARTLETT. Mr. President, what I consider to be a significant address was made on November 5 at Portland, Oreg., before the Inland Empire Waterways Association by the Honorable Elmer B. Staats, Deputy Director of the Bureau of the Budget. Mr. Staats' thoughtful words deserve the consideration of all Americans and I ask unanimous consent that the text of his speech be printed following my remarks.

I am particularly glad that Mr. Staats delivered this speech before the Inland Empire Waterways Association, which is a western organization devoted to and dedicated to the proper resource development of the great western section of the United States.

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

AN INVESTMENT FOR THE FUTURE-RESOURCES DEVELOPMENT

Mr. Chairman, members of the Inland Empire Waterways Association, and guests; it is perhaps symbolic that your association was founded 30 years ago in 1933-at a time when the Nation was going through the throes of a great economic depression. Our gross national product in 1933, measured in dollars of today's purchasing power, was $150 billion.

rate of 588 billion, an increase of 290 percent. Now, 30 years later, it stands at a Our labor force at that time had 25 percent unemployed. Today, while falling short of the national objective of full employment, the unemployment rate is still only about 5.5 percent.

for the full development of the water and This association has been a unifying force land resources of this area. At the time the association was founded, the population of the Northwest area-Washington, Oregon, Idaho, and Montana-was only 3,575,000. Today this population has grown to 6,214,000, while per capita income has risen from $814 to $2,370, again measured in dollars of today's purchasing power.

Since wars begin in the minds of men, it is in the minds of men that the defenses of peace must be constructed.

not come about from chance or accident; it has come about through private initiative, careful planning, and wise cooperation between government and nongovernment groups and among Federal and State and local agencies. This growth has come about because our people have had the vision to develop and to put into productive use the vast resources which nature has provided. But we cannot rest on our laurels.

FUTURE NEEDS

Those of you in business and industry know the importance of careful choices in investing funds and manpower. We in Government likewise must be concerned about making the right investment at the right time. To do this, other than very subjectively, we have to relate every decision we make to conditions which are likely to exist in the future.

In looking to the future, what strikes us most strongly is the population factor. In the short time between January 1961, when President Kennedy took office, and the end of fiscal year 1964, there will be some 10 million more people living in this country. That increase is equal to more than half the present population of Canada. If the estimates of the National Planning Association are right, by 1973 our population will exceed 225 million-nearly 40 million more than last year. It takes no great exercise of the imagination to realize that this increase will have a tremendous effect on our economy-on the consumption of resources, on transportation, on housing, on recreation, and on the labor force.

What kind of an economy will we have in 1973-just 10 years from now? Here again, the National Planning Association estimates a gross national product in excess of $900 billion (in 1962 prices) which is $350 billion above 1962 production. And that organization also estimates an average family income of $9,300 compared to $7,100 last year. Finally, it looks ahead to an employment level of 87 million persons-17 million more than in 1962.

This is a profile of a strong and progressive nation. But it all rests on a big assumption: that both our private and public decisions will be wise enough and farsighted enough to make all this potential a reality.

To get where we want to be in 1973, we will have to deal more effectively with problems that beset us today. This means coming to grips with the various factors that slow our progress: chronic recessions, unemployment, overcrowded schools and too few teachers, racial discrimination, obsolete plant and equipment, and insufficient demand to take up the slack in our existing productive potential. It means that we must accelerate our rate of economic growth, control inflation, and keep down prices and costs through continuing productivity improvements,

strengthen our scientific research, carry on a strong effort to advance our technology and explore a wide range of sources of energy. In short, if we are to achieve our expectations in the 10 years ahead, we must accept a heavy agenda and commit ourselves to carrying it out.

THE ECONOMIC OUTLOOK

The President has set forth a comprehensive program for national economic growth. His tax program is expressly designed to deal with the chief factors that have adversely affected our economic performance in recent years. Why does he believe tax reform is so urgent? Even though in the third quarter of this year the gross national product rose to an alltime high of $588 billion, and new records were set for both personal incomes and industrial production, there are disturbing indications that our economy is operating considerably below its potential. Even now, with 22 years of continuous economic expansion behind us, the Nation is producing at a rate which is $30 to $35 billion a year below what it could be producing; the average operating rate in manufacturing is 87 percent of capacity which is considerably below the preferred rate; and more than 52 percent of the labor force is unemployed. And private investment has fallen to an average rate of only 9 percent of GNP-well below its performance in the period of 1947-57. In recent years our idle industrial capacity has dampened domestic

investment incentives and encouraged the flow of American capital abroad, with resulting strains on our balance of payments.

If our economic performance is to improve as it must, there needs to be sufficient demand for goods and services to put our unemployed and idle industrial capacity to work. The President's tax reduction program is intended to furnish a major stimulus to consumer and business spending. The alternative-advocated by some-would be to stimulate the economy through sharply increased Federal expenditures an alternative not acceptable to the President. We are still operating with a tax system which in most respects is the one we adopted to restrain excessive demand during wartime. The effect of the present tax system is such that the Federal budget would have shown a handsome string of surpluses rather than deficits since 1957, if the economy had been operating close to full employment. We have been witnessing a paradox-tax rates which were set high to absorb an excessive proportion of the gross national product at full employment levels now block the achievement of full employment and yield disappointingly low revenues.

There are many people who think it is wrong to cut taxes while the budget is still in deficit. I do not share this concern. Tax reduction should provide a general stimulus to our economy and, when production and earnings advance, so will Federal revenues. Within a few years total revenues under the new tax system should be even larger than those which have been produced under present rates. A more rapid economic advance-which a tax cut should assure-is the most direct route we can take to realizing balanced budgets. The longer we put it off, the longer we will have to live with the problems that are keeping a full employment economy out of reach. Our goals for 1973 may stand or fall on the decision we make in 1963.

THE FEDERAL ROLE IN NATURAL RESOURCES DEVELOPMENT

Economic growth involves still another aspect of public policy; namely, the constructive development of our natural resources-land, water, minerals, fuels, forage, timber, fish and wildlife-including their use for recreation which is a necessary part of our lives in an advanced society.

But

We have been fortunate in the abundance of natural resources available to us. this gives us no grounds for complacency. Many of our resources are nonrenewable, and even those that are renewable will require wise management and long leadtime for their development. There is a consensus that our natural resuorces limitations should not hold back our economic growth if we recognize the need for technological change, substitution of abundant and cheap raw materials for scarce and expensive ones, investment in improved resource management and conservation, and some imports.

Let me cite a few examples of recent progress in natural resources conservation and development:

Overall, Federal expenditures for water resources and related developments-excluding operation and maintenance-more than doubled in the period 1956-64, while the budget as a whole was increasing by less than 50 percent and most of that increase was being limited to defense and space programs. Expenditures for these water resources programs are estimated to rise from $1,346 million in 1962, to $1,477 million in 1964. During this 3-year period, we have provided for 393 new project starts, including 182 watershed protection projects.

The saline water conversion program has gotten off the ground.

A new attack has been initiated on water pollution-a destructive and inexcusable form of waste.

We have established the open spaces program to help urban areas acquire space for recreation and other needs.

Legislation has been proposed to establish a Land and Water Conservation Fund to aid the States in overall outdoor recreation

planning and in acquiring lands and developing necessary recreation facilities. The legislation also provides for financing acquisition of recreation lands suitable for addition to national parks and forests.

Three new national seashores have been authorized by Congress, and proposals for five others have been made.

The President has put forward a farsighted 10-year program in oceanography-in his own words, a plan "to seed and weed and harvest the oceans."

We have, within the past 10 days, proposed important new legislation dealing with cost allocation and cost sharing for recreation and fish and wildlife enhancement at water resources projects.

New coal research efforts have led to a coal-to-gasoline pilot plant to be located in West Virginia.

In short, we are investing more and more in our natural resources. In 1962, Federal expenditures on natural resources amounted to $2.1 billion. In 1964 a tight budget year-expenditures are estimated at $2.5 billion, and this budget will provide for 46 new starts on water resources projects, other than watershed projects, estimated to cost nearly $1 billion.

I sometimes wonder what has happened to our perspectives and our sense of values when this kind of prudent public investment is condemned with such epithets as "pork barrel" and "boondoggle" and worse. I can think of even stronger objectives that could better be applied to a government which closed its eyes to the ravages of floods, to the drying up of our streams, to the deterioration of our rivers and harbors, to the stench of pollution, and to the denial of water and power and natural beauty to those who are prepared to pay for them and use them to move this Nation ahead.

We will not grow while we let our natural resources lie untapped, while we fail to bring them into the service of our society, while we glorify our great past and shut our eyes to our great future. There is no "fiscal responsibility" when we refuse to count as assets our dams, our harbors, our river channels, our reclaimed lands, and all the lives and property saved by flood protection. If we cannot tell the difference between waste and investment, we do not understand even the basic ABC's of economic growth-and I, for one, am not prepared to concede this.

The extent to which the budget can provide for investment in resources conservation and development depends, to be sure, on the President's judgments as to the priorities confronting us as a nation. This is where the budget process becomes an important tool for reviewing and evaluating the wide spectrum of programs and needs which constitute the business of the United States at home and abroad. The very difficult job of the President is to balance the needs and opportunities for natural resources development against such competing requirements defense, space exploration, housing, health, education, and foreign aid, to name only a few. It becomes a question of stretching resources to cover our most critical needs, of deciding what must be done now and what must wait.

as

In the present budgetary climate, with the prospect of short-run revenue losses resulting from tax reduction needed to stimulate private demand and economic expansion, we must of course apply very critical criteria of need and immediacy to every program and every new proposal. We are now at work on the budget for fiscal year 1965, and our general guideline is the President's statement to Mr. MILLS of the House Ways and

Means Committee that "Our long-range goal remains a balanced budget in a balanced full-employment economy. Tax reduction must ✶✶✶ be accompanied by the exercise of even tighter rein on Federal expenditures which meet strict criteria of national need."

As one who has spent over 20 years in Federal budgeting, I am well aware that budget decisions are seldom easy; those facing us in the 1965 budget will be even more difficult and promise to remain so for at least the next year or two. I can assure you that to our best ability the 1965 budget will show continued forward progress in the important field of natural resources development. Even though we may not be able to go as far as we might prefer, it is not our intention to come to a standstill, much less fall behind.

PLANNING FOR WATER RESOURCES

In all our work in the field of water resources, planning is taking on more and more importance. There is nothing abstract about this at all. We know that we can make serious mistakes and misjudgments unless we relate what we do, not merely to current circumstances, but to conditions that are likely to exist 10, 20, or even 50 years from now. I can think of at least two major efforts that have been made in this field in recent yearsthe Cooke Commission Report in 1950, and the recent report by the Senate Select Committee on National Water Resources, chaired by the late Senator Kerr, of Oklahoma.

Population changes figure importantly in forward planning. Increasing urbanization and industrialization will also affect future demands for water. Another factor is the way we are presently organized in the Federal Government to deal with water resources. We have four major executive branch agencies and four legislative committees of the Congress concerned with construction. There are other agencies, such as the Public Health Service, whose missions affect, or are affected by, water resources development. In addition, the States enter the picture at many points and have an important role to perform. Altogether, the need for coordination and cooperative planning is very plain.

One of the major recommendations of the Senate committee was that comprehensive plans be prepared for the major river basins and that grants be made to the States to assist in their planning efforts. In 1961, therefore, the President recommended enactment of a Water Resources Planning Act which would have established river basin commissions patterned after the Texas and Southeastern river basin study commissions, to prepare comprehensive river basin plans for the development of water and related land resources. That bill had as its aims (1) coordination of Federal agencies through a Water Resources Council made up of the Secretaries of the four Federal departments with major responsibilities in the water resources field, (2) cooperative Federal-State planning through river basin commissions, and (3) grants to assist the States in water resources planning.

As many of you know, representatives of the States objected to certain features of the bill. Consequently, Senator ANDERSON introduced a revised bill in the present Congress. We believe that the Anderson bill, S. 1111,

with some amendments, will provide a good basis for comprehensive planning.

Because of the urgent need for river basin plans to guide future investment, the Bureau of the Budget asked each of the Federal agencies to coordinate their water resources planning programs last year in connection with the 1964 budget. They have continued to work together and are now reviewing their plans for fiscal 1965 and future years. This has been a useful effort: planning concepts have been clarified; priorities of studies are being identified; and gaps and overlaps are being reduced. All this effort, I believe, will

prove very helpful to river basin commissions when they are established.

I believe that in years to come we will look back to the Senate Select Committee report as a major turning point in focusing the Nation's attention on our water resource problems and in charting a course for the future. Its emphasis on comprehensive planning is a major contribution. Its thorough spelling out of water resource problems throughout the country served to make it clear that the problem is not a sectional one but a national one. Its forecast as to the steep upward curve of water consumption brought home forcibly the urgency of timely and forthright measures to conserve and develop our water resources. And it made it plain that the job cannot be done without spending some money, and in the form of prudent public investment. Overall, it demonstrated that to do the job that must be done, it will take the collective efforts of Federal and State governments and private

groups.

Let me stress the importance of this point. The task of conserving and developing the Nation's resources is tremendous. Whether it is the production of power, the management of forests and rangelands, the development of water resources, or the conservation of helium, there is enough for all of us to do Federal, State, local and private organizations-if we are serious about it. Each group can accomplish certain tasks better than others. What we need to do is to get together.

ECONOMIC JUSTIFICATION

authorization and construction starts is the first step in building public confidence and support for water resources development. From this basic framework we can go on to make the test of relative priority in the setting of the annual budget.

With respect to problems of reimbursement and cost sharing between the Federal Government and non-Federal bodies, the President has directed a study to be made by the Secretary of the Interior, working closely with the Secretaries of Agriculture, Army, and Health, Education, and Welfare. These problems are anything but simple. This past week the Bureau of the Budget, in behalf of the executive branch, sent to the Congress a draft bill to establish cost sharing and reimbursement policy for recreation and fish and wildlife enhancement in connection with water resource projects. This bill would not require non-Federal sharing of these costs at every project, but only where such costs are relatively substantial-most of the costs would be borne by the Federal Government. CONCLUSION

As we take inventory, we cannot fail to recognize the progress we have made. Our goals are clearer. The task is better understood as one of national dimensions. The President has made plain the relevancy of water resources development to our paramount objective of economic growth and full employment. The investment character of is seen more clearly than in the past. Compublic expenditures for resource development prehensive planning has advanced from the stage of an idea and is rapidly becoming a reality.

It has been a time of progress, of gains that we can measure. But for all of us, much remains to be done.

Common standards would be important to decisionmaking even if only one agency were engaged in water resources development, but it is even more essential when several agencies are in the field. Inconsistent evaluation standards were criticized by the Cooke commission in 1950. Out of this came the Bureau of the Budget's celebrated circular A-47-regarded in some quarters as an overly restrictive policy and by others as a step toward rational decisionmaking. time went on, however, A-47 became less suited to the purposes which it tried to serve. But the need for common standards had been established.

Last year the President approved a new set of policies, standards and procedures for formulating and evaluating projects. This document reflects the views of the present administration and takes into account advances in policy and practice in the water resources field since 1952. One important change was to raise the limit on the period of economic analysis of a project from 50 to 100 years. Another change provides that joint costs of a project such as a dam may now be allocated to recreation whereas previously only the specific costs of recreation facilities could be so treated.

We are not yet out of the woods on standnow going on to develop a more precise means ards and procedures, however. Efforts are of evaluating the benefits of recreation, including hunting and fishing. In addition, the concept of the least costly alternative means of providing recreation, which limits the cost allocation to recreation, is being studied. More work must also be done on cost allocation methods.

On the whole, therefore, I think we have come a long way in improving our standards and procedures. The better these are, the less likelihood there will be of irresponsible charges of "pork barrel" methods. Good standards for basing decisions on project

BOMBS

Mr. McGOVERN. Mr. President, the distinguished columnist, Mr. Marquis Childs, has written an important article which appears in today's Washington Post.

Mr. Childs ask the question which is causing growing concern among a number of us in the Congress and throughout the country: "How much nuclear killer capacity is enough?"

Mr. Childs calls attention to the related problems of what we do with the personnel employed at at our nuclear weapons plants when shifts in our defense requirements occur.

I ask unanimous consent that the column by Mr. Childs be printed at this point in the RECORD.

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

A SURPLUS PROBLEM IN NUCLEAR BOMBS (By Marquis Childs)

How much nuclear killer capacity is enough? In shaping the new defense budget this is a deeply puzzling question Secretary to put up to President Kennedy. of Defense McNamara will in the end have

A big industrial development with payrolls in a half-dozen States depends on continuing to produce fissionable material for nuclear weapons. Yet, as it is often put, we've got the stuff running out of our ears.

Secretary McNamara would like to cut back production. The Atomic Energy Commission is agreeable to some cutbacks. But the decision is complicated by a proposal bound to generate pressure as the results of a cut are seen in a loss of jobs, the mothballing of plants and the dispersion of highly skilled technical staffs.

The proposal originating with Senator CLINTON ANDERSON, Democrat, of New Mexico, chairman of the Joint Congressional

Atomic Committee, is to stockpile plutonium. The raw material, uranium, would be mined, processed at great cost and put back in the

earth.

On the face of it, with a present capacity to destroy every target area in the Soviet Union several times over as the President has stated at least twice, this would seem to be a lunatic form of makework. But the astute ANDERSON makes a case for the stockpile.

It is true, he says, that there is a large oversupply. In the U.S. arsenal are many old-fashioned nuclear bombs so big that they would not be dropped under any circum

stances. If these were remade and the fissionable material put into up-to-date weapons we would have at least a 10-year supply. But the big surplus is in "yellow cake”uranium oxide being processed from uranium by mills such as those of the Kerr-McGee Co. under long-term contracts. What ANDERSON contemplates is a cutback in the mills, leaving a few large, efficient plants like that of Kerr-McGee to go on turning out "yellow cake." This, together with the huge current surplus, would be processed into plutonium that keeps indefinitely.

"We might," as one expert put it, "want to take a look at it after a thousand years."

Plutonium in the stockpile could be made up very quickly into bombs and warheads, ANDERSON points out. It would also be available for peacetime use in power reactors if and when nuclear power production comes to be more nearly competitive with other

power sources.

That would mean maintaining Oak Ridge in Tennessee, Savannah River in South Carolina, and Hanford in the State of Washington in operation in part if not in entirety. Hanford has a payroll of 8,000 and while this is small as compared to Boeing it is important to Washington.

The scale of the overkill in America's nuclear arsenal produces highly technical and violently emotional arguments. In his courageous speech last August calling for substantial cuts in arms spending Senator GEORGE MCGOVERN, Democrat, of South Dakota, was content to use the phrase "several times over." But along with other Members of Congress he had heard the presentation of Prof. Seymour Melman, of Columbia University, who contends that overkill is 1,200 times what is necessary to destroy all

Communist target areas.

The Pentagon says that such far-out figures are based on the impossible assumption that every single nuclear weapon would be used. They ignore the destruction of a part of the arsenal in a Soviet first strike. And they also overlook the fact of a wide disparity of weapons, including tactical battlefield weapons, not all of which would be zeroed in on the major target.

An

But certain Pentagon officials are deeply concerned with a stockpile so overflowing that storage has become a major problem. indication of this was the deliberate leak last summer that Defense would like to cut back its weapons requirements with the Atomic Energy Commission by a billion dollars.

During the fiercely fought controversy over the nomination of former AEC Chairman Lewis Strauss to be Secretary of Commerce, charges were put in the record showing the interlocking relationship of powerful financial interests, including Kuhn-Loeb and the Rockefellers, in uranium. The late Senator Robert Kerr, Democrat, of Oklahoma, through Kerr-McGee, was a major figure in this gold rush. It was part of the complex that brought abundance with the inevitable growth of deeply vested interests.

VETERANS DAY

Mr. WILLIAMS of New Jersey. Mr. President, in gratitude and appreciation for the service brave men-both past and present-have rendered us, our people have set aside November 11 of each year for the observance of Veterans Day. Nothing could be more warranted nor well deserved.

Since the birth of this Nation-a nation dedicated to freedom-it has been necessary for men to bear arms to perpetuate and preserve our way of life. This is the price we have had to pay for liberty in a world reluctant to let it flower.

In less than 200 years, the people of this land have built America into a great country-a country built upon the foundation of democracy. We owe this opportunity for growth to our veterans, who have been willing to give their lives so that we might remain free to build a strong nation.

A day of tribute is small payment to the thousands who have died, the thousands who have been maimed and handicapped, the millions who have returned to civilian life determined to build a better world for their children—and our children-and to our young men still giving this country a part of their lives, away from home and loved ones, to pro

tect our hard-earned freedoms.

Yet,

"Thank you" is a small phrase. behind it is the love of a nation. It is not the hollow phrase sometimes extended to strangers; rather, it carries the sincerity and warmth of appreciation we would extend to a close friend, a brother, father, or a son. The security of our country-our homes-personally affects all of us. Our "thank you" has real meaning.

But we are in the debt of our veterans for more than their valor during wartime. for more than their valor during wartime. We are grateful for their participation in We are grateful for their participation in peacetime as well. Because they have experienced the horror of war, because they have seen the starkness of tyranny, they have returned to civilian life deter

mined to build a better world.

They have returned to us with a strong sense of citizenship, with the realization that foreign affairs affect us as vitally as domestic affairs, and with the realization that a government "of the people" must be participated in by the people.

Through veterans' organizations, they have been active in civic affairs, and have worked to improve their communities. They have worked with our youth to build a sense of patriotism and love of build a sense of patriotism and love of country. They have been active in politicountry. They have been active in political life on both the State and National cal life on both the State and National

level.

Of our present Members of Congress, 362 are veterans. Our last three Presidents have been veterans.

There are 22,133,000 veterans in our population today. In a very real sense, our country's veterans have earned the reputation of being "the foundation stone of Americanism." This does not mean reputation of being "the foundation stone they are rabid adherents to the extreme right, but rather that our veterans have been diligent in the performance of intelligent patriotism tempered with a

strong sense of the real world we live in. They have rolled up their shirt sleeves and helped democracy work.

They have given a great deal, but, like anything of value, peace and freedom are expensive items on the world market. Our veterans have made the downpayment. It is up to all Americans to actively join them in their efforts to improve our country, to maintain our freedoms, and to achieve world peace.

By working to become better and more enlightened citizens, we will be paying back our debt the way, I am sure, our veterans would like it paid.

VIEW OF FEDERAL GRANTS-IN-
AID

Mr. MUSKIE. Mr. President, on September 4, 30 Senators joined with me to introduce S. 2114, a bill to provide for periodic congressional review of future Federal grants-in-aid to States and to local units of government. In my remarks accompanying the introduction of this measure and in a subsequent address on October 31, I explained some of the more general reasons for my advocacy of this bill.

Additional arguments in support of S. 2114 especially as they relate to the fiscal aspects of grants-in-aid-are found in a draft report on "The Role of Equalization in Federal Grants-in-Aid" which was recently considered by the Advisory Commission on Intergovernmental Relations, and in a study entitled "The Federal System as Seen by State and Local Officials: Results of a Questionnaire Dealing with Intergovernmental Relations," which is being prepared by the staff of the Subcommittee on Intergovernmental Relations. Those two studies indicate some of the difficulties we will experience with respect to future grant programs. Most of the existing programs have two distinct, but coordinate, provisions which determine each State's share of Federal grant money. The allocation provision, or apportionment formula, relates to the manner in which the Federal appropriations for a particular program are apportioned among the recipient governments, provided the grant conditions are met. The matching provision pertains to the funds required to be raised by the States and sometimes by the local governments as their share of the aided program's cost. The operation of both provisions within existing grants-in-aid suggests that there are a number of fiscal problems with which congressional committees must periodically come to grips.

The question of whether an equalization factor should be included in these provisions also highlights the need for more careful congressional scrutiny. Since World War II, Congress has paid increasing attention to the question of whether the distribution of Federal grants should take into account differences in the capacities of the States to finance aided programs from their own resources. It is unlikely that the future will reverse this trend. The effort to