shortened. The development loan fund is a financial instrument, and ought to be looked upon as a part of our overall national security policy.

Mr. FULBRIGHT. Mr. President, will the Senator yield?

Mr. HUMPHREY. I yield to the chairman of the Foreign Relations Committee.

Mr. FULBRIGHT. I wish to emphasize the point that we have not intended, and it is not now intended, to have this fund operate as a moneymaking banking institution. It is, as the Senator has said, a tool in our foreign policy. The original Marshall plan, as most people believe, was a successful operation. It was never considered to be a moneymaking operation. When we look back on it now, perhaps it would have been wise if the program had been based on soft loans—that is, loans requiring repayment with low interest-because we would be very fortunate indeed with such loans coming due at this juncture.

At the same time, we know that a small percentage of the original program was in the form of loans, and we are now receiving an average of $300 million a year in repayment on the part of the program which was in the form of loans.

Therefore the lending part is quite sound, and the committee and the Congress have gone along with it.

On the judgment of the best authorities I know in this field, if we put the minimum as high as the Senator from Alaska would have it, for all practical purposes it will, in effect, price us out of the market. The underdeveloped countries are much less likely to be able to bear that kind of loan with a high interest rate than the original Marshall countries would have been able to do if we had imposed it at that time.

I therefore hope that the Senate will not further emasculate the bill by adopt

ing this amendment.

Mr. MOSS. Mr. President, I support the amendment offered by the distinguished Senator from Alaska [Mr. GRUENING]. I do so because I think it represents sound economics for this country, and reasonable loan repayment terms for recipient nations.

Very simply, the amendment provides that governments which receive foreign assistance development loans from the United States must pay the same rate of interest on these loans as our Government had to pay to borrow the money in the first place.

I realize that the Foreign Relations Committee has made some progress in this respect. Under the term of H.R. 7855, as reported, the interest rate on development loans has been set at threefourths of 1 percent for the first 5 years of the loan, and 2 percent thereafter. This is an improvement over the present method, which gives the administration the discretion to set interest rates at even lower, long-term levels. But it still leaves the American taxpayer digging down in his pocket to pay a considerable difference. Our Government is borrowing the money it lends at the rate of 3 percent plus. In any way one figures it, there is a gap of from 1 to 3 or 4 percent which must be made up. This is

The amendment would remove the gift element from development loans. It would take out the subsidy—the subsidy for which the American people are now picking up the tab. It would differentiate more sharply between our loan and our grant programs in foreign assistance. It would make the loan program faithful to its name, and give the American people some assurance of getting back all of the money they put into it.

The adoption of the amendment would not, as some have suggested, make us look like Uncle Shylock, and blur the image we have so carefully and painstakingly built up. Instead, it seems to me, it would only cement the picture of a good friend who is willing to help out over the rough places-who says, "Sure, I'll loan you the money, but I'll have to borrow it first myself. I don't want anything extra for my trouble. All I ask is to be covered in costs and the amount of the loan itself."

Who could ask a friend to do more? Mr. President, we are currently facing our largest public debt in history, and a long-continued imbalance of international payments has brought our gold reserves to their lowest reserve level since 1939. I am sure there is not a Member of the Senate who does not agree that we must retrench wherever possible, and who is not seeking ways to do so.

In the past 3 years, we have done much to set our economic house in orderparticularly in foreign assistance. For example, we have reduced the amounts of grants to foreign governments, while still giving them aid for mutual benefit. We have set the pattern of more and more lending of aid rather than giving it away. The share of development loans in foreign assistance programs has increased by $450 million between 1961 and 1964, while development grants have increased $100 million. During this time, supporting assistance has been reduced by $600 million. This is all encouraging, but it is not enough.

I feel that the report submitted by the Committee on Foreign Relations on H.R. 7855 is one of the most remarkable in the history of the foreign assistance program. I compliment the distinguished chairman, Senator FULBRIGHT, and the members of the committee on it. The frankness with ness with which the entire foreign assistance program is discussed will undoubtedly lead to further improvements in it.

I was pleased, of course, that the committee made the recommendations it did on the rate of interest on development loans. I am glad the members agreed that this is an area in which action should be taken. But, in my opinion, the committee did not go far enough.

I must disagree with the thinking, expressed in the report, that by continuing "soft" loans, the United States will encourage other European nations to reduce interest rates and lengthen maturity of foreign aid loans. Why is not the reverse more likely to be true? Why would it not be easier to get Western European nations to assume an even larger share of foreign aid lending if they could

would be paying back the full costs of making the loan as well as the amount of the loan itself. None of this country's experiences with Western European nations would indicate to me that their leaders are not good businessmen, seeking first of all to strengthen their own financial structure, so that they can continue to improve their positions in the world.

The argument has also been offered that many of the recipient countries, particularly those whose economic growth is vital to the United States, cannot take on the added financial burden of increased interest rates. I have been told that their debt servicing capacity cannot sustain it. If I remember correctly, the same argument was made when the development loan program itself was first inaugurated—that the underdeveloped countries could not undertake at this time to pay back many loans, no matter how long term they were. Yet there is no question that the development loan program has been a signal success, and is admittedly one of the most salutary changes in the foreign aid program since its inception. Surely underdeveloped countries that are finding in the loan program a solution to many of their pressing problems will not discard it-or us-because we ask them to pay as much themselves for the money as it costs us to get it for them.

As Senators know, I have long been a supporter of the foreign aid program. I agree with it both in principle and in philosophy. I am convinced that it has been, from the beginning, a program which is in our own self-interest; and I know in my heart that it is in our great American humanitarian tradition.

But I do feel that as we vote to con

tinue it, we should consider from every angle the current condition of our own people and the current condition of our own financial resources, and should give them first call. We must trim our foreign assistance program whenever and wherever we can without endangering its objectives. The adoption of this amendment is one concrete way to do this.

In conclusion, let me stress that we must not attempt to profit from the economic conditions of the lesser developed countries, but by the same token we should not provide a subsidy at the expense of our own economy, and at a time when we can ill afford to do so.

I strongly urge the adoption of the amendment offered by the Senator from Alaska.

Mr. HUMPHREY. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER.

clerk will call the roll.

The

amendment. The yeas and nays having been ordered the clerk will call the roll.

The legislative clerk called the roll. Mr. HUMPHREY. I announce that the Senator from Virginia [Mr. BYRD], the Senator from West Virginia [Mr. BYRD], the Senator from Oklahoma [Mr. EDMONDSON], the Senator from North Carolina [Mr. ERVIN], the Senator from Tennessee [Mr. GORE], the Senator from Indiana [Mr. HARTKE], the Senator from Florida [Mr. HOLLAND1, the Senator from South Carolina [Mr. JOHNSTON], the Senator from Missouri [Mr. LONG], the Senator from Louisiana [Mr. LONG], the Senator from Minnesota [Mr. McCARTHY], the Senator from Wyoming [Mr. McGEE], the Senator from Michigan [Mr. MCNAMARA], the Senator from Connecticut [Mr. RIBICOFF], the Senator from Virginia [Mr. ROBERTSON], the Senator from Georgia [Mr. RUSSELL], the Senator from Florida [Mr. SMATHERS), the Senator from Mississippi [Mr. STENNIS], the Senator from Georgia [Mr. TALMADGE], and the Senator from South Carolina [Mr. THURMOND] are absent on official business

I also announce that the Senator from California [Mr. ENGLE] is absent because of illness.

On this vote, the Senator from Virginia [Mr. BYRD] is paired with the Senator from West Virginia [Mr. BYRD]. If present and voting, the Senator from Virginia would vote "yea," and the Senator from West Virginia would vote “nay.”

On this vote, the Senator from Virginia [Mr. ROBERTSON] is paired with the Senator from Indiana [Mr. HARTKE). If present and voting, the Senator from Virginia would vote "yea," and the Senator from Indiana would vote "nay."

On this vote, the Senator from Mississippi [Mr. STENNIS] is paired with the Senator from Wyoming [Mr. MCGEE]. If present and voting, the Senator from Mississippi would vote "yea," and the Senator from Wyoming would vote vote “nay.”

On this vote, the Senator from South Carolina [Mr. THURMOND] is paired with the Senator from Michigan [Mr. McNAMARA]. If present and voting, the Senator from South Carolina would vote "yea," and the Senator from Michigan would vote "nay."

On this vote, the Senator from South Carolina [Mr. JOHNSTON] is paired with the Senator from Minnesota [Mr. MCCARTHY]. If present and voting, the Senator from South Carolina would vote

"yea," and the Senator from Minnesota would vote "nay."

On this vote, the Senator from Louisiana [Mr. LONG] is paired with the Senator from California [Mr. ENGLE]. If present and voting, the Senator from Louisiana would vote "yea," and the Senator from California would vote "nay."

On this vote, the Senator from Oklahoma [Mr. EDMONDSON] is paired with the Senator from Florida [Mr. HOLLAND]. If present and voting, the Senator from Oklahoma would vote "yea," and the Senator from Florida would vote “nay.”

CIX- -1354

Mr. KUCHEL. I announce that the Senator from Utah [Mr. BENNETT), the Senator from Kentucky [Mr. COOPER], the Senator from Arizona [Mr. GOLDWATER], the Senator from Kansas [Mr. PEARSON], and the Senator from Massachusetts [Mr. SALTONSTALL] are necessarily absent.

If present and voting, the Senator from Massachusetts [Mr. SALTONSTALL] would vote "nay."

On this vote, the Senator from Utah [Mr. BENNETT) is paired with the Senator from Kentucky [Mr. COOPER]. If present and voting, the Senator from Utah would vote "yea," and the Senator from Kentucky would vote "nay."

On this vote, the Senator from Arizona [Mr. GOLDWATER] is paired with the Senator from Kansas [Mr. PEARSON]. If present and voting, the Senator from Arizona would vote "yea," and the Senator from Kansas would vote "nay." The result was announced-yeas 30, nays 44, as follows:

The PRESIDING OFFICER. The amendment to the committee amendment, as amended, will be stated.

The LEGISLATIVE CLERK. On page 42 of the committee amendment, as amended, between lines 11 and 12, it is proposed to insert the following:

(b) At the end of section 601 add the following new subsection:

"(c) (1) There is hereby established an Advisory Committee on Private Enterprise in Foreign Aid. The Advisory Committee mendations for achieving the most effective shall carry out studies and make recomutilization of the private enterprise provisions of this Act to the head of the agency charged with administering the program under Part I of this Act, who shall appoint the Committee.

"(2) Members of the Advisory Committee be selected from the business, labor, and shall represent the public interest and shall professional world, from the universities and foundations, and from among persons with extensive experience in government. The Advisory Committee shall consist of not more

than nine members, and one of the members shall be designated as chairman.

"(3) Members of the Advisory Committee shall receive no compensation for their services but shall be entitled to reimbursement in accordance with section 5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b-2) for travel and other expenses incurred in attending meetings of the Advisory Committee.

"(4) The Advisory Committee shall, if possible, meet not less frequently than once each month, shall submit such interim reports as the Committee finds advisable, and shall submit a final report not later than December 31, 1964, whereupon the Committee shall cease to exist. Such reports shall be made available to the public and to the Congress.

"(5) There is hereby authorized to be appropriated such sum as may be necessary to enable the Advisory Committee to carry out its functions."

On page 42, line 12, strike out "(b)" and insert "(c)".

On page 42, line 16, strike out "(c)" and insert "(d)".

On page 43, line 12, strike out "(d)" an insert "(e)".

Mr. JAVITS. Mr. President, the Senate Foreign Relations Committee report on H.R. 7885 clearly indicates that the foreign aid program needs major reorganization and reorientation. It is my considered view that nothing less than the assignment of a major role for private enterprise in foreign aid will save this vital program from successive even deeper appropriation cuts. Since 1958, I have been urging the Senate to take the lead in studying specific proposals for the introduction of American business into the aid program. into the aid program. Many of my proposals have been accepted. Properly applied foreign economic aid is so essential to our national interest that we must use every available resource including U.S. private enterprise as well as the organs of our Government in the endeavor to make it effective.

What is required is the marshaling of the private U.S. economy in a major and imaginative manner behind the development effort.

My amendment, which calls for the establishment of an Advisory Committee on Private Enterprise in Foreign Aid would begin to accomplish this purpose.

The purpose of this Committee would be to make recommendations to the Administrator of the aid program for achieving the most effective utilization of private enterprise in carrying out the objectives of the Foreign Assistance Act of 1961, as amended. The Committee would consist of not more than nine membersmen and women of stature from the business and professional world, the universities, foundations, and persons with extensive experience in government. During the life of this Committee, it would make continuous recommendations in close cooperation with the head of the agency and with those actually charged with carrying out the private enterprise activities of the agency. The Committee would cease to exist at the end of 1 year.

The amendment springs from a suggestion of William S. Paley, chairman of the board of CBS. He aptly characterized the lack of close relationship of private enterprise to our aid program during the course of an address on foreign aid before the 49th National Foreign Trade Convention on October 20, 1962: An obvious weakness of our aid program

is the continuous failure to harness American private enterprise effectively to the development task. Each year language stressing this need is piously included in the aid legislation. But year after year the matter remains deadlocked; Government on the one

side skeptical of giving private interests

special advantages; and private business on the other side unprepared to use stockholders' money without greater guarantees or inducements than are now offered.

What is needed is a formula, or mechanism, or set of ground rules, which will harness the colossal power, imagination, and experience of American business and finance to the foreign development task. For several years leaders from various branches of American life have stressed this need and have proposed plans-for new credit devices, new kinds of guarantees, new forms of contracts, new patterns of business-government collaboration. But few of the ideas that have

been put forward have been translated in

action.

It is my considered view, and this view has widespread support in the business world, including Mr. Paley, that only through the high level advisory group that I propose can we revitalize and make a lasting success of our aid effort.

The time has arrived to recognize that the potential for the most dramatic con

tribution to the economic development of the free world lies in creating opportunities for the citizens in the developing nations to apply their own skill and resources in partnership with the private enterprise of the United States and other aiding nations and without unjustifiable interference and restraint by governments. In my view, the U.S. foreign aid program should be made the primary vehicle to demonstrate the great force of private enterprise for creating conditions for human opportunity and dignity and the evolution of stable and democratic institutions.

Although there has been notable progress in broadening the private enterprise activities of AID; namely, in the area of investment guarantees, support to local development banks, investment surveys,

dollar and local currency loans to private business and the Foreign Assistance vate business and the Foreign Assistance Act of 1963, now before us, lends further emphasis to encourage and facilitate participation by private enterprise, the participation by private enterprise, the potential of private enterprise in the aid program has not been developed.

The foreign aid program has profited from infusion of new ideas from American business, universities, foundations on numerous occasions in the past, with major and beneficial results both in terms of specific legislation and new terms of specific legislation and new emphasis in terms of the national interemphasis in terms of the national interest of the United States. The recomest of the United States. The recommendations of the Harriman committee in 1947 resulted in the guidelines which served as ground rules for the Marshall plan; the Randall Commission in 1954 made a series of recommendations which in turn had major legislative consequences in the area of military aid, on the issue of loans versus grants, the formulation of projects supported by aid, and so forth; the Fairless committee in 1957 made recommendations regarding the greater utilization of private enterprise through foreign aid, pointed out the need for long-range economic development planning, reaffirmed the need of military aid expenditures and collective security; the Boescheustein comtive security; the Boescheustein committee in 1959 made a series of constructive proposals regarding development loans, investment guarantees, taxation and antitrust action; the report prepared in 1959 by Ralph I. Straus as special consultant to the Under Secretary of State for Economic Affairs pursuant to section 413(c) of the Mutual Security Act of 1954, as amended an amendment which I proposed in 1958 and which was then accepted-further strengthened the role of the private sector in foreign aid by calling for the greater use of tax policy in stimulating foreign investment, the greater use of investment guarantees in lieu of direct loans; the creation of credit insurance for exports, direct Government dollar and Cooley loans to private enterprises abroad; and requested specific steps in the application of our antitrust laws to foreign investment.

The Clay Committee, in its March 1963 report, made a series of proposals regardreport, made a series of proposals regarding the entire program, a good many of ing the entire program, a good many of which have been reflected in the bill reported out by the Senate Foreign Relations Committee, including a provision prohibiting assistance for Governmentowned manufacturing, utility, merchandising or processing enterprises abroad; dising or processing enterprises abroad; reductions in the overall authorization for the fiscal year 1963 program, and harder terms for development loans. harder terms for development loans. The Senate Foreign Relations Committee's report on the fiscal year 1963 bill tee's report on the fiscal year 1963 bill also calls for a greater concentration of U.S. aid in the future as well as the increased channeling of U.S. aid through multilateral agencies, further reflecting multilateral agencies, further reflecting the Clay Committee's recommendations.

Some may say "Why have another advisory committee with the Clay Comvisory committee with the Clay Committee still in office?" I believe that there are at least three specific reasons why an advisory committee specifically charged to make continuing recommen

dations regarding the effective utilization of private enterprise in the foreign aid program is essential now:

First. The Clay Committee created by the President on December 10, 1962, is not authorized by statute or an Executive order; the amendment I propose would authorize an advisory committee by the Congress to do a specific job for a specific period;

Second. While the Clay Committee is charged to look into all U.S. Government's foreign operations programs in the economic and military fields, the advisory committee I propose would devote itself specifically to improving the private enterprise operations of the program. The Clay Committee, given its broad task, cannot be expected to deal with such a specific problem on a continuing basis.

Third. I have discussed my proposal with AID Administrator Bell, who favors it as an important aid to the program.

The Senate by its actions this week has clearly indicated that unless the aid program is recast, the entire foreign aid program may be lost next year. This advisory committee would play a major role in the reshaping of this vital aid program so that by its more effective functioning it could assure its own continuance.

I am gratified that the amendment has found favor in the eyes of Senators who are opposed to many parts of the program-such as the Senator from Oregon [Mr. MORSE], who has been leading the opposition, and the Senator from Alaska [Mr. GRUENING]—and that it has also found favor in the eyes of Senators who very strongly favor the program, such as the Senator from Minnesota [Mr. HUMPHREY]-and also that the amendment is acceptable to the administrator of the program, Mr. Bell.

Mr. President, one thing on which all can agree is that there must be a better way. One of the great failures of the program has been the failure to tie it in directly with the U.S. private enterprise system, so that our corporations—both in regard to the aid side of the program and in regard to the technical assistance side-could themselves carry out whole sections of foreign aid, which essentially is a business operation.

For years, I have been convinced that this could be done more cheaply, more effectively, and with greater credit to our country and more impact on the countries which receive our aid if much of it were carried out by the U.S. private enterprise system.

I find it very interesting to note that in the bill it is proposed, for the first time, that use be made of the machinery of the International Bank for Reconstruction and Development, to channel loans.

Mr. SCOTT. Mr. President, will the Senator from New York yield to me? Mr. JAVITS. I yield.

Mr. SCOTT. I am glad the Senator from New York has offered the amendment, for I believe it has a meritorious aspect. I believe it most important that private enterprise be utilized to the maximum extent possible in connection with

the administration of our foreign aid. So I hope the amendment will be accepted by the Senator in charge of the bill, and I am very glad to support the amendment.

Mr. JAVITS. Mr. President, I appreciate very much the support of the Senator from Pennsylvania.

Mr. FULBRIGHT. Mr. President, will the Senator from New York yield briefly to me?

Mr. JAVITS. I am glad to yield to the distinguished Chairman of the Foreign Relations Committee.

kindly said, having worked in that field for so many years, it is very gratifying to me that we have finally come to the to me that we have finally come to the point at which the mechanism is accepted as an essential way in which to operate this great program.

I ask unanimous consent to have printed at this point in my remarks comparisons prepared by the AID of its own

private enterprise activity, which demonstrates how very essential it is that a mechanism such as the Advisory Committee on Private Enterprise would prepare should be introduced into the whole foreign aid program.

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

Comparisons of AID private enterprise activity commitments or authorization basis, fiscal years 1963 versus 1962

1. All U.S. economic assistance..

[In millions of dollars]

(a) Of which development loans (including PSP).........----

Mr. JAVITS. I thank the Senator from Arkansas, and I am very appreciative of his support.

Mr. MORSE. Mr. President, will the Senator from New York yield briefly to me?

Mr. JAVITS. Iyield.

Mr. MORSE. I am very glad that the distinguished Senator in charge of the bill, the chairman of the Foreign Relations Committee, will accept the amendment and will take it to conference. I believe it important that there be a yeaand-nay vote on the question of agreeing to the amendment, for the benefit of the conferees. So, Mr. President, on the question of agreeing to this amendment to the committee amendment as amended, I ask for the yeas and nays.

The yeas and nays were ordered. Mr. MORSE. Mr. President, if the Senator from New York will yield further to me, I believe several points should be stated for the RECORD, for the assistance of the conferees.

Mr. JAVITS. In a moment I shall be glad to yield for that purpose to the Senator from Oregon.

Mr. President, this amendment springs from a speech made by William S. Paley, chairman of the Columbia Broadcasting System, on October 20, 1962, to the 49th National Foreign Trade Convention. Incidentally, I point out that he headed one of the major committees in the material resources field, which also, in its way, some years ago aided the Government.

I took up the proposal with the AID, and in that connection we have been attempting to find a plan by means of which this proposal would work. The Agency favors the amendment, particularly in view of the fact that it calls for an operation very much in line with a similar operation in connection with the USIA which has been very successful.

It is clear that it is most important that segments of the U.S. private enterprise system be utilized in order to carry

this out.

Mr. President, as the chairman of the Foreign Relations Committee, the Senator from Arkansas [Mr. FULBRIGHT] So

(a) Direct to private undertakings (#) -
(b) Nonproject commodity loans.
(c) Loans to development banks (#).

3. Investment guarantees issued
(a) Specific risk coverage issued (#).
(b) Specific risk outstanding June 30-
(c) Extended risk coverage issued (#)-
(d) Extended risk outstanding June 30.
(e) LA housing coverage issued (#).

4.

Cooley loans (Public Law 480, 104(g) authorized (#)). (f) LA housing outstanding June 30.

5. Investment surveys approved (#)

1 Total is for all AID commitments (using authorization for development loans), excluding Inter-American Development Bank trust fund but including PSP loans under development loans.

2 Total of 14 loans for $167 million includes fiscal year 1962 overlap of loans made by AID from its formation Nov. 4, 1962. 3 Development loans for purchase of commodities, components, machinery, and parts to sustain industrial production are considered to have primarily a private impact. Of the totals for fiscal year 1963 and fiscal year 1962, for example, nonproject loans to India alone totaled $240 million and $243 million, respectively, of which over 85 percent is estimated to have supported private industrial and commercial enterprises. Commodity loans financed by supporting assistance commitments ($333 million and $395 million in fiscal year 1963 and fiscal year 1962, respectively) may have comparable private impact, but differing primary purposes, are not included.

4 Loans to development banks facilitate relending to private activities in industry, agriculture, and housing. By June 30, 1963, AID and its predecessor agencies had authorized 57 dollar loans totaling $372 million (net) for such institutions in 32 developing countries. Counting local currency loans, the United States has supported 85 such institutions in 46 countries with over $1 billion in dollars and local currencies.

Total issued includes DLF all-risk guarantee extended in August 1962 to VALCO project.

6 All-risk guarantees issued by DLF are carried in specific risk totals.

"As of September 1963, 7 extended risk guarantees have been authorized totaling some $33 million for self-liquidating pilot housing projects in Latin America, and 4 others totaling some $25 million are under intensive review. Equivalent.

9 Between Jan. 1, 1962, and June 30, 1963, AID approved 68 Cooley loans amounting to $61.2 million. During fiscal year 1964 AID approved the largest loan made to date-$17.5 million equivalent in Indian rupees for a joint United States-Indian fertilizer plant which is rece ving dollar financing from the Export-Import Bank. Currently some $148 million of Cooley funds in 24 different countries are available.

10 As of September 1963, over 50 investment surveys costing an estimated $1.3 million were being undertaken by potential private U.S. investors and operating companies in some 18 less developed countries. Surveys cover pos sible investments in such fields as papermaking, prestressed concrete, food processing, and plastics. The United States may bear up to half of survey costs, but only if investment does not result.

Mr. KEATING. Mr. President, will the Senator yield?

Mr. JAVITS. I yield.

Mr. KEATING. I wish to express my strong support for the amendment offered by my colleague. It would be a constructive and effective addition to the bill. I compliment the Senator on the initiative and initiative and farsightedness of the proposed language.

I know that a recommendation has been made in the committee report that more aid be granted through international organizations. This may raise seThis may raise serious questions since under existing law U.S. firms provide 80 percent of the goods used under the program. If international institutions were used, U.S. firms would have no preference. Contracts might even go to Communist countries for equipment paid for by U.S. dollars. It seems to me that one of the things which the Advisory Committee, which would be established under the amendment of my colleague, could well do, would be to look out for the interests of American enterprise and American workers in connection with any change in the focus or method of giving aid to international organizations. On this point, as on

others, I feel that the leaders of American business and labor should have a voice, and the amendment offered by the Senator will give them an opportunity to be heard.

Mr. JAVITS. I am very grateful to my colleague.

Mr. MORSE. Mr. President, I wish to speak for the purpose of clarifying the record for conference reference. Many of us have frequently been in conference when we have been asked by the conferees to show them the basis for the action taken by the Senate. The Senator from New York deserves great credit for the work that he has been doing in that field, particularly in connection with the wonderful work that he has been doing in Mexico. He has gone to Mexico several times and has talked with business groups in connection with the object of trying to arrive at an arrangement whereby a private segment of our economy would play a great role in carrying out our foreign aid program.

In recent years I have spoken before on various occasions to U.S. Chamber of Commerce groups in various Latin American countries and other American businessmen's groups not associated

with the U.S. Chamber of Commerce abroad. I have always discussed in those speeches, in part, the need for considering our American businessmen and organizations abroad as American economic ambassadors working with the State Department.

I speak only of Latin America because I do not know what the situation is in other countries, but I suspect that it is no different. At least in Latin America there is a very great feeling on the part of our American business interests that they have not been taken into a cooperative partnership arrangement with our State Department and with our foreign aid Administrator in connection with the administration of our foreign aid program. Great sums of money could be saved. Responsible and reliable business interests abroad would consider this an opportunity for great public service on their part, patriotically motivated.

I should like to cite an example or two. First, I refer to the housing program in Latin America. We are working hard to export to Latin America a system of building and loan associations. It is true that the National Organization of Building & Loan Associations has been cooperating with us. For example, it has made available to us some of their men. To mention two, there is Mr. Gordon, and Mr. Courshon, who have worked with my committee not only in Latin America but they have worked for the State Department in Africa in connection with the building and loan concept. That kind of housing program should not be administered by AID at all, except that AID should be in the seat of overseeing-with the position of, shall I say, a regulator. But the actual administering of that part of the program should be done entirely by the private segment of the economy under such rules, regulations, and policy restrictions that we can justifiably impose.

That is not the only segment of the private economy that can be put to work under the AID program. We are trying to be of assistance in Latin America in connection with the building of some basic industry.

For example, I have been in a couple of great steel plants in Latin America built by American concerns. One is in Argentina and another is in Brazil. Both were built by the McGee Construction Co. of Ohio. The McGee Construction Co. of Ohio-at least their executives, their policymakers-and other other companies in the heavy construction industry, such as the McGee Construction Co., ought to have turned over to them, under the supervision of the AID program, a very important administrative job in connection with the developing of heavy industry under the AID program.

gram itself, but also with the know-how that ought to be brought to work in connection with the administration of the whole housing program under AID.

not have to worry about political freedom.

I could take more time-but I shall not to list one type of industry and business after another which needs to be established in Latin America so that political freedom can be made secure.

Mr. CARLSON. I heartily concur with the pending amendment. I think it is most important to begin to develop as rapidly as we can, full cooperation between the Alliance for Progress in Latin America and private industry. We are making progress. But I believe that there is still plenty of room for more. The distinguished Senator from Oregon mentioned housing. I am proud of the fact that the Garvey Corp. in Wichita, Kansas, has built some homes in Peru. They are attempting to build some in Colombia and other Latin American states. That is a project of private industry. I believe that is the way we should proceed. That is one way to improve the situation in that area.

Mr. MORSE. Mr. President, the last point in making the legislative record, before I take my seat, is that I believe the proposal will prove to be the most beneficial effect of our program in Latin America. I will confine myself to Latin America.

This would also be true of other parts of the world. What are we really trying to do under our Alliance for Progress program? We are attempting to establish a system of economic freedom for the benefit of all the people of Latin America.

It is not easy to establish such a system. It is necessary to export the institutions which have the technology and the know-how to create the industries and the businesses which will produce the jobs which will make men economically free. What we really are attempting to do is to export the form of economic freedom, as we implement economic freedom, called the private enterprise system.

If we cannot sell the private enterprise system in Latin America we can forget about political freedom in Latin America. We must get the horse before the cart, instead of the cart before the horse. That is what has been wrong with much of our Latin American policy for many years. We have been trying to talk to those people in terms of political reforms, which has been a waste of our time and our money. We must talk to them and act with them in relation to our economic forms. Then they will achieve political freedom.

It is necessary to establish building and loan associations, to build heavy industries, not on a government-to-government basis but on a project-to-project basis, so that the private segment of the American economy can be the economic ambassadors and administrators representing the U.S. Government-under fair regulations. Then economic freedom will be established; and we shall

There were many long discussions in the Committee on Foreign Relations about the overmanning of the foreign aid program. It is overmanned. We could save great sums of money by cutting into the surplus personnel of foreign aid around the world.

Many complaints have been made to us by people who have gone to various parts of the world and have found a surplus of personnel in the foreign aid program. This amendment would help in that regard.

If wisely used and developed, this proposal could help to decrease some waste in foreign aid, and to decrease personnel as well.

The important thing is that the amendment would give us a great opportunity to export our system of private enterprise. Until we can make that available to the masses of the people in Latin America, we shall not have an opportunity to make political freedom secure there.

Mr. President, I yield the floor.

Mr. JAVITS. Mr. President, I shall complete the argument, and then the Senate can vote. I wish to mention two things which I consider to be quite important.

If we are to do this, and do it honestly and well, there is required a revised view on the part of AID and the State Department. This has been one of the real problems in respect to cooperation between private enterprise and the Government, in that there has been a mutual suspicion. It is to be hoped that the committee will be high level enough and representative enough to dispel that suspicion. That is important, Mr. President.

I started representing business when I was a young man, and later represented big business. I know it from being closely associated with it. I know how important this consideration is.

Secondly, the efforts of well-intentioned men, like the Senator from Oregon [Mr. MORSE] and other Senators who feel deeply that something is wrong with the aid program, are inevitably frustrated because no alternatives are proposed for our consideration.

I should like to have the legislative history show that if the committee is to be worth its salt-and its record is yet to be made it must help us by providing alternatives, so that those who have a deep disquiet about this program may