have something else to which to turn, for which to put up a case. As we stand now, we do not have that.

I hope very much that the Senate will approve the amendment.

I yield.

Mr. JAVITS. Mr. ALLOTT. I believe the amendI believe the amendment of the Senator from New York is praiseworthy. However after watching the operations of the State Department over the past few years, I must say that nothing reminds me more of their actions as the little signs I have seen in country stores all over my own State and in small offices elsewhere, bearing the whimsical expression, "Don't confuse me with the facts-my mind is already made up." I do not ask my questions humorously. I am serious.

Does the Senator believe the State Department will pay any attention to the report of this commission? I do not question that the commission could make a contribution, but what attention does the Senator believe the State Department would pay to it?

Mr. JAVITS. One of the things we have been short of is affirmative alternatives. Frankly, I do not know whether the State Department will pay any attention to the report or whether the State Department will treat it as a pleasant boondoggle which I and other Senators have engaged in.

I believe it will be supremely important in giving us some kind of text from which we can argue, from which we can suggest alternatives. That is what we are really short of.

The State Department has the staff, the equipment, the facts, and the figures it requires. Although we know there is something wrong, all that we can do is to cut the program to ribbons. That is the only alternative we have. I should

like to have another choice.

I hope the State Department will give this question the attention and devotion which it deserves. If it does not, at least we shall have something upon which we can base a policy-with some knowledge, some facts and some background-instead of being bereft, as we are today, of proper alternatives.

Mr. ALLOTT. I should like to ask the Senator another question in all seriousness. We have witnessed the confiscation of property in many countries; such has occurred in the past few days.

Does the Senator believe that a Commission could stop such confiscation of property? This is an important matter, because until assurance can be given, businessmen will not invest in Latin America. Anyone who invests there now, generally speaking, I would consider to be quite foolish.

What can the Senator say with respect to how his amendment might affect what seems to be a generally uniform policy in Brazil, Peru, and other places to nationalize industries and to confiscate American property and American goods of the American businesses who have gone into such countries to do exactly the job the Senator wishes to have done?

Mr. JAVITS. In the first place, there is nothing universal about the situation

My first answer is that there are positions of strength in Latin America which can be buttressed and sustained, which should not be let go the way of others.

Second, the American business community is heavily involved in Latin America today. If my memory serves me correctly-and I believe I am correct-the figure for American investment in Latin America now is between $8 billion and $9 billion, with thousands of Americans employed. There is a constant reinvestment of earnings, though the net investment now is only some $200 million a year, which is very small and one of the real disasters Latin America has faced. So there is a big stake, and there are involved many persons who can accomplish constructive ends.

Third, it is conceivable that this program might be accomplished by private enterprise acting as an agency of the Government, carrying out Government contracts. There would be a great saving overhead for a bureaucracy, and there would be available the capability of persons who do not have to be trained for the job and who could be employed in the foreign aid program.

For all those reasons, much as I join with the Senator in deprecating the way certain Latin American countries commit economic suicide when they destroy the climate for investment by private area and an opportunity for this kind enterprise, I still think there remains an of program to be effective.

Mr. ALLOTT. There is in this area silence want it understood that I believe an opportunity; but I would not, by my the list of countries the Senator has cited is an accurate list. The Senator apparand receiving different mail and has difently has been reading different books ferent friends from those I have in Latin America, because I cannot go along with him in that respect.

tional boards and bureaus, I shall supWhile I am reluctant to support addiport the pending amendment because we must explore the area; we must get something done. However, I have some question about whether the State Department will cooperate.

information by going to one of those corporations than by going to a Government agency. What is the advantage of getting this advice?

Mr. JAVITS. It is not a Government committee; it is a private enterprise committee entirely. It will give out pooled advice. Various segments of private industry will also debate the question with each other, checking the advice against each other. Incidentally, many of these people will not meet with one another now for fear that somebody is going to charge them with violation of the antitrust laws.

In addition, it will introduce other elements into the area, such as labor and educational institutions-it is not a very big committee; it has a limitation of nine-in an effort to do the job.

Mr. AIKEN. If a committee of businessmen doing business in foreign countries were to get together, the antitrust laws would not apply to their findings.

Is that correct?

Mr. JAVITS. It would not if they confined themselves to the mandate of the law, namely, how foreign aid can best function in the private enterprise area.

Mr. AIKEN. The Senator does not think they would do anything else?

enough Government officials around to guarantee against that.

Mr. JAVITS. I think we would have

Mr. MORSE. Mr. President, I think the Senator from Colorado has raised a good question. Next week we shall have

Hickenlooper amendment with relation an amendment or two to broaden the to nationalization of industries in Latin America. I think it needs to be broadened.

In regard to this amendment, the question was raised as to whether the tention to it. Judging from the way it State Department would pay much athas ignored suggestions in the past, one would think the answer should be "No." have the lurking suspicion that since However, things have since changed. I the debate on the bill and the changes made in it, this being the first time such changes have been made, it may dawn means business in regard to the foreign on the State Department that Congress aid program. I would not be surprised if the State Department cooperated with us in putting into effect the objectives of the amendment.

Mr. AIKEN. Can the Senator estimate the cost of the amendment?

Mr. JAVITS. I hesitate to state a minimal figure, but I would say not more than $50,000. No compensation is provided for members of the committee; it is strictly a housekeeping arrangement.

Mr. AIKEN. What advantage would this committee have over Standard Oil of New Jersey, Anaconda Co., Grace Line, and other powerful corporations that are already doing business there? If I really wanted to obtain information or advice on these out-of-theway places, I think I could obtain more

could do much to strengthen the foreign aid program; it could do much to win widespread support for the aid agency within the business and professional community in this country.

The Senator from New York has done much to strengthen and increase participation by the American private enterprise sector in the foreign aid program. I am happy to be associated with Senator JAVITS in the joint effort growing out of the NATO Economic Committee to strengthen the private enterprise sector in Latin America. I refer to the work of the Atlantic Community Development Group for Latin America.

Monroney

Hill
Hruska
Humphrey

Inouye
Jackson
Javits

Jordan, N.C.
Jordan, Idaho

The Senate Foreign Relations Committee has recommended for consideration by the executive branch, a number of changes in the direction of the foreign aid program. In considering these recommendations, a highly qualified ad- Magnuson visory committee should be of invaluable assistance.

The PRESIDING OFFICER (Mr. MCINTYRE in the chair). The question is on agreeing to the amendment offered by the Senator from New York [Mr. JAVITS], for himself and other Senators, to the committee amendment, in the nature of a substitute, as amended.

The yeas and nays have been ordered, and 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. HOLLAND], 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], the Senator from South Carolina [Mr. THURMOND], and the Senator from Texas [Mr. YARBOROUGH] are absent on official business.

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

I further announce that, if present and voting, the aforementioned Senators would each vote "yea."

Mr. KUCHEL. I announce that the

Senator from Kentucky [Mr. COOPER], the Senator from Arizona [Mr. GOLD

WATER], the Senator from Kansas [Mr. PEARSON] and the Senator from Massachusetts [Mr. SALTONSTALL] are necessarily absent.

If present and voting, 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] would each vote "yea." The result was announced-yeas 74, nays 0, as follows:

Lausche

Byrd, Va.

Byrd, W. Va.

Cooper
Edmondson
Engle
Goldwater

Gore
Hartke

Morse

Morton

Moss

Mundt

Muskie

Nelson
Neuberger
Pastore

NAYS-0

Pell
Prouty
Proxmire
Randolph
Scott
Simpson
Smith
Sparkman
Symington
Tower
Walters
Williams, N.J.
Williams, Del.
Young, N. Dak.
Young, Ohio

So Mr. JAVITS' amendment to the committee amendment was agreed to.

Mr. JAVITS. Mr. President, I move to reconsider the vote by which the amendment to the the amendment was agreed to.

Mr. KEATING. Mr. President, I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. LAUSCHE. Mr. President, I have sent an amendment to the desk, which I now offer.

The PRESIDING OFFICER. The amendment will be stated.

The LEGISLATIVE CLERK. On page 47, between lines 12 and 13, it is proposed to insert the following:

(4) The second sentence of subsection (f), as amended by paragraph (3), is amended by inserting a period after the word "Act" and striking out the remainder of such

sentence.

Mr. LAUSCHE. I shall speak for not more than 5 minutes.

Mr. MORSE. Mr. President, I ask for the yeas and nays on the amendment.

The yeas and nays were ordered. Mr. MILLER. Mr. President, is the Senator's amendment printed?

Mr. LAUSCHE. No; it is not.

I direct the attention of Senators to

page 63 of the report, subsection 620 (f). That is the subsection with which my amendment deals. Subsection (f) specifically declares:

No assistance shall be furnished under this act, as amended (except section 214(b)), to any Communist country.

the international Communist conspiracy; and (3) such assistance will further promote the independence of the recipient country from international communism.

My amendment would absolutely bar the granting of aid under the Foreign Assistance Act, but not under Public Law 480, to any Communist country. The following language would remain in this section as it is:

For the purposes of this section, the phrase "Communist country" shall

Mr. MORSE. Did the Senator say that paragraph (g) would remain as it is? Mr. LAUSCHE. No. What I shall read now would remain as it is:

For the purposes of this subsection, the phrase "Communist country" shall include specifically, but not be limited to, the following countries:

On page 68 of the report the countries which are now known as Communist countries are specifically identified. This specific identification does not preclude the administrator from declaring other countries to be Communist. The specific identification includes Poland and Yugoslavia.

The Proxmire amendment, adopted granting of foreign aid to Yugoslavia. yesterday, specifically prohibits the My amendment would specifically prohibit the granting of foreign aid, but not aid under Public Law 480, to any of the countries identified in this measure.

Mr. MORTON. Mr. President, will the Senator from Ohio yield?

from Kentucky. Mr. LAUSCHE.

I yield to the Senator

Mr. MORTON. The Senator's amendment would be in consonance with the action taken by the Senate yesterday in adopting the Proxmire amendment, by making his amendment apply to all Communist countries.

Mr. LAUSCHE, That is correct.

Mr. MORTON. Is the Senator cer

tain that his amendment would not pre

clude Public Law 480 relief?

Mr. LAUSCHE. Yes; because my amendment relates to aid "under this act." I do not say "under this or any other act."

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

Mr. LAUSCHE. I yield.

Mr. AIKEN. I assume that the Sena

tor's amendment is, perhaps, aimed not only at Yugoslavia, but also at Poland

and all other Communist countries. Can the Senator tell us how much of the land in Yugoslavia is publicly owned? Mr. LAUSCHE. It is claimed that substantial parts of the land in Yugo

Subsection (f) further provides: This restriction may not be waived pursuant to any authority contained in this act.

To that extent the language in the act will remain as it is, except that a period will be placed after the word "act." There will be stricken from that subsection the language:

This restriction may not be waived pursuant to any authority contained in this act unless the President finds and promptly reports to Congress that: (1) such assistance is vital to the security of the United States; (2) the recipient country is not controlled by

lectivized; but the fact is that there is indirect collectivization through the imposition of huge taxes.

Mr. AIKEN. Such as in the United States?

Mr. LAUSCHE. And through the exaction of other tribute. In theory, the land is privately owned; in fact, it is

collectivized.

Mr. AIKEN. Can the Senator from Ohio tell us who owns the electric lines in Yugoslavia?

Mr. LAUSCHE. They are government owned.

Mr. AIKEN. Who owns the railroads?

Mr. LAUSCHE. The government owns them.

Kuchel Lausche

Mr. LAUSCHE. Yes; the government owns everything in Yugoslavia except, possibly, some paltry shoe shop or barber shop, or operation of that type.

Mr. AIKEN. Does the government own most of the shops and enterprises in Yugoslavia?

Mr. LAUSCHE. Yes; except the small enterprises, such as I have mentioned.

Mr. AIKEN. How does it happen that Yugoslavia has laws pertaining to bankruptcy and other activities, such as we have in the United States?

Mr. LAUSCHE. I cannot answer that question. Yesterday the Senate adopted the Proxmire amendment, which dealt with Yugoslavia. I desire to make the law applicable to all Communist countries alike.

Mr. AIKEN. I agree with the Senator from Ohio that if the law is applied to Yugoslavia, it should apply to all other Communist countries, as well. But does the Senator undertake to make the law apply to shipments under Public Law 480?

Mr. LAUSCHE. I do not.

Communist country of the Eastern Europe group, it should apply also to other Communist countries. Therefore, I have no objection to the amendment.

The PRESIDING OFFICER. Did the Senator from Ohio ask for the rescinding of the order for the yeas and nays on his amendment?

Mr. LAUSCHE. No.

The PRESIDING OFFICER. The question is on agreeing to the amendment of the Senator from Ohio [Mr. LAUSCHE] to the committee amendment in the nature of a substitute. The yeas and nays have been ordered, and 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. HOLLAND], the Senator from South Carolina [Mr. JOHNSTON], the Senator from Missouri [Mr. LONG],

Mr. LAUSCHE. I yield.

Mr. CHURCH. Is it not correct that Is it not correct that at the present time, having adopted the Proxmire amendment, we are confronted with the anomalous situation of requiring the President to make certain findings respecting our national security, which findings, if made, would permit aid to be given to such Communist countries as the Union of Socialist Soviet Republics and Red China themselves?

Mr. LAUSCHE. The Senator is correct.

Mr. CHURCH. But not to the one Communist country, Yugoslavia, which has given evidence of being less dominated by the international Communist conspiracy than any other? Is not the Senator, by his amendment, seeking to apply the prohibition equally to all Communist countries, instead of selecting Yugoslavia for more onerous treatment than would be given any other such country?

Mr. LAUSCHE. The Senator from Idaho has described the situation accurately.

Mr. CHURCH. I commend the Senator for offering his amendment.

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 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], and the Senator from Georgia [Mr. TALMADGE], the Senator from South Carolina [Mr. THURMOND], and the Senator from Tennessee [Mr. WALTERS], are absent on official business.

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

I further announce that, if present and voting, the aforementioned Senators would each vote "yea."

Mr. KUCHEL. I annouce that the Senator from Kentucky [Mr. COOPER], 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 Kentucky [Mr. COOPER], the Senator from Arizona [Mr. GOLDWATER], the

Mr. LAUSCHE. I yield. Mr. FULBRIGHT. I am perfectly willing to accept the amendment. The Senator has already explained it. I desire to add one comment. No aid is provided in this bill for any Communist country. While the words of the amendment make certain the understanding that such aid will not be granted, I did not want the implication to be left that the administration was preparing to dole out billions of dollars to Communist countries.

Mr. AIKEN. Mr. President, will the Senator from Ohio yield once more? Mr. LAUSCHE. I yield.

and the Senator from Massachusetts [Mr. SALTONSTALL] would each vote "yea.”

The result was announced-yeas 74, nays 0, as follows:

Mansfield

Kennedy

Morse Morton

Moss Mundt

Muskie

Scott Simpson Smith Sparkman Symington

Tower

Williams, N.J. Williams, Del. Yarborough Young, N. Dak.

Young, Ohio

NOT VOTING-26

Holland

Johnston

Long, Mo. Long, La. McCarthy

McGee

McNamara Pearson

Ribicoff

Robertson Russell Saltonstall Smathers Stennis

Talmadge Thurmond Walters

So Mr. LAUSCHE'S amendment to the committee amendment, as amended, was agreed to.

Mr. LAUSCHE. Mr. President, I move that the vote by which my amendment to the committee amendment was agreed to be reconsidered.

Mr. FULBRIGHT. Mr. President, I move to lay on the table the motion to reconsider.

The motion to lay on the table was agreed to.

Mr. LAUSCHE. Mr. President, I call up and offer, to the committee amendment, as amended, my amendment No. 294.

The PRESIDING OFFICER. The amendment of the Senator from Ohio to the committee amendment, as amended, will be stated.

The LEGISLATIVE CLERK. On page 52 of the committee amendment, as amended, beginning with line 15, it is proposed to strike out through line 5 on page 53, as follows:

SEC. 402. Section 231 of the Trade Expansion Act of 1962 (Public Law 87-794, approved October 11, 1962) is amended as follows:

(a) Insert "(a)" before the words "The President shall".

(b) Add the following new subsection: "(b) The President may extend the benefits of trade agreement concessions made by the United States to products, whether imported directly or indirectly, of a country or area within the purview of subsection (a), when he determines that such treatment would be important to the national interest and would promote the independence of such country or area from domination or control by international communism, and reports this determination and the reasons therefor to the Congress."

On page 53, in line 6, it is proposed to strike out "SEC. 403" and insert in lieu thereof "SEC. 402".

Mr. DIRKSEN. Mr. President, will the Senator from Ohio yield briefly to me?

Mr. LAUSCHE. I yield.

Mr. DIRKSEN. I wish to ask the majority leader about the schedule for the remainder of today.

Mr. MANSFIELD. Mr. President, I am glad this question is raised, because there have been some queries as to what will be the business of the Senate for the rest of the evening.

It is my understanding that the disposition of the pending amendment to the committee amendment will conclude the business of the Senate for today.

ORDER FOR RECESS TO TUESDAY, AT NOON

Mr. MANSFIELD. Mr. President, I now ask unanimous consent that when the Senate completes its business this

evening, it stand in recess until 12 o'clock

noon on Tuesday next.

The PRESIDING OFFICER. Is there objection? Without objection, it is so

ordered.

AMENDMENT OF FOREIGN ASSISTANCE ACT OF 1961

The Senate resumed the consideration of the bill (H.R. 7885) to amend further the Foreign Assistance Act of 1961, as amended, and for other purposes.

Mr. DIRKSEN. Mr. President, let me inquire whether the Senator from Ohio expects to have final action on his amendment taken this evening.

Mr. LAUSCHE. Yes, for I shall not

speak for more than 5 minutes in discussing the amendment.

Mr. MORSE. Mr. President, on the question of agreeing to the Lausche amendment to the committee amend ment, as amended, I ask for the yeas and

nays.

The yeas and nays were ordered. Mr. LAUSCHE. Mr. President, I think my amendment will be best understood by referring to page 81 of the report. The amendment deals with the Trade Expansion Act of 1962.

The provision deals with section 231, which in the unitalicized lettering contains the language of the present law. The present law reads as follows: SEC. 231. PRODUCTS OF COMMUNIST COUNTRIES OR AREAS

(a) The President shall, as soon as practicable, suspend, withdraw, or prevent the application of the reduction, elimination, or continuance of any existing duty or other important restriction, or the continuance of any existing duty-free or excise treatment, proclaimed in carrying out any trade agreement under this title or under section 350 of the Tariff Act of 1930, to products, whether imported directly or indirectly, of any country or area dominated or controlled by communism.

The material which my amendment would strike is set forth in italicized letters on page 81. That italicized language gives the President discretion under certain circumstances to grant favored-nation treatment, notwithstanding the language contained in the existing law. If the amendment were adopted, that italicized language would be stricken, and the law as it is now written would continue in existence. The President would be required, as soon as practicable, to suspend and remove favored-nation treatment from Communist countries. No Communist country would be excepted. All countries would come within the provisions of the law. The difference between my amendment and the amendment upon which the Senate last voted is that the preceding amendment was primarily and completely related to the Foreign Assistance Act. My amendment deals with the Trade Expansion Act of 1962.

I am prepared to answer any questions that Senators wish to ask.

Mr. LAUSCHE. Mr. DOUGLAS.

I yield.

I should like to ad

Mr. LAUSCHE. I yield.

is involved, I should like to ask the Mr. CURTIS. In order to clarify what Senator a question. Under the existing law the most-favored-nation treatment is not accorded to Communist countries. Is that correct?

Mr.LAUSCHE. That is correct.

Mr. CURTIS. If the amendment of the Senator from Ohio is agreed to, will the existing law continue in effect?

Mr. LAUSCHE. That is correct.

Ohio and possibly also to the Senator from Arkansas. Is not the term "mostnomer? A nation which is said to be favored-nation" something of a misgiven "most-favored-nation" treatment is not given an exclusive privilege, is it, but is it not merely given the same rights which other countries receive under that clause? In other words, the country is given equality of treatment and not a special or unique favor. Is that not true?

Mr. LAUSCHE. That is true with

Mr. LAUSCHE. I yield.

Mr. FULBRIGHT. The action last year in relation to the Trade Expansion Act has not been put into effect, but is pending the outcome of the action of the

Senate. Yugoslavia has had most-fa

vored-nation treatment since 1881.

The significance of the proposal is that if we do not reject the amendment of the Senator from Ohio, that provision will go into effect and the most-favorednation treatment will be withdrawn. But it has not yet been withdrawn.

Mr. LAUSCHE. The Senator has accurately described the situation. But I also feel that my answer to the question of the Senator from Nebraska [Mr. CURTIS] is accurate. Under the law as it now reads, the President is required, as soon as practicable, to terminate export and import trade with Communist countries. The act was passed in 1862, but not up until the present time has the President deemed it to be practical to terminate the most-favored-nation treatment.

Mr. CURTIS. In order to make the situation clear, if the amendment of the Senator from Ohio is adopted, mostfavored-nation treatment cannot be continued to Yugoslavia?

Mr. LAUSCHE. Or to any other Communist country. That is correct.

Mr. CURTIS. It applies to Yugoslavia or to any other Communist country. Mr. FULBRIGHT. That is correct. Mr. CURTIS. "Most-favored-nation treatment" means that the recipient country of most-favored-nation treatment can receive the lowest tariff or have granted to it the lowest import restrictions that are granted to any country in the world.

Mr. LAUSCHE. The Senator is correct.

Mr. CURTIS. If a country should not receive the most-favored-nation treatment, it would operate under our ordinary tariffs that are in existence.

Mr. LAUSCHE. That is correct. Mr. CURTIS. If a country does not have the benefit of most-favored-nation treatment, its goods are not necessarily barred from our country.

that category, but I would say that the term "most favored nation" does not mean that one particular nation has preferential treatment over and above all others.

Mr. DOUGLAS. I thank the Senator.

Is it not true that there are in effect

most-favored-nation agreements with approximately 44 countries, including all the countries inside GATT, and also including some of the countries outside

GATT?

Mr. LAUSCHE. The Senator is correct.

Mr. FULBRIGHT. That is correct. I should like to make a comment with particular reference to the question asked by the Senator from Nebraska to illustrate the effect of the amendment. The Senator has said that the amendment would not bar any trade; it would not legally or theoretically. But in practice it would. For example, I call attention to some of the items that we import from such countries.

Under

Consider the item of bristles. the most favored nation agreements the tariff is 2 cents a pound. That would be increased to 3 cents a pound, which would be a 50-percent increase.

Chicory root would be increased from 1 to 2 cents.

Cherry juice would be increased from 17 cents a gallon to 70 cents a gallon.

For all practical purposes we would make those items, and others, so competitive that the countries involved could not trade with us.

One of the larger items is willow bags and baskets, on which the present tariff is 222 percent. That percentage would be increased to 50 percent if the amendment is adopted.

Tobacco is one of the larger items. The tariff would be increased from 1234 cents a pound to 35 cents a pound. In that field there is competition with Turkey and Greece, because the tobacco they produce is needed by manufacturers in our country to blend with our domestic tobacco.

Mr. LAUSCHE. The Senator is correct.

Mr. LAUSCHE. That is correct.

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

slavia for the benefit of our own tobacco manufacturers.

I also have a similar communication from the largest beer manufacturer in

this country, Anheuser-Busch, which is located in St. Louis. They buy hops. According to that manufacturer, the amendment would play "hops" with their business. It would disrupt their busi

ness.

Mr. CURTIS. Mr. President, will the Senator from Ohio yield so that I might ask the Senator from Arkansas one further brief question?

Mr. LAUSCHE. I yield.

Mr. CURTIS. What is the date of the trade agreement with Yugoslavia, what was the territory called at the time the agreement was made, and what was its form of government?

Mr. FULBRIGHT. The original treaty was with Serbia in 1881, and the succeeding government includes Serbia, which was the largest element in the area. The new country succeeded to that treaty, and it has been so treated since Yugoslavia's creation. There has been There has been no interruption in that relationship. Mr. CURTIS. But there has been no additional treaty?

No.

Mr. FULBRIGHT. Mr. CURTIS. It is contended that the Tito government should have the mostfavored-nations treatment by reason of a treaty made with Serbia in 1881?

Mr. FULBRIGHT. The country has had the benefit of the agreement all during the period since. The agreement has never been abrogated.

Mr. CURTIS. I know that that is the administrative finding of the State Department.

Mr. FULBRIGHT. That is a fact. The treaty contains a provision that on a year's notice it may be abrogated. But the question is not whether or not it can be abrogated. There is no doubt that we could take such action. I am not arguing that this necessarily is a violation of a treaty.

I only say that it involves a treaty. The question at issue is the wisdom of doing this. I did not mean to leave the impression that in any case it would be illegal, or ultra vires, or anything else. It is a question of wisdom.

Several Senators addressed the Chair.

which has been recommended by the committee is not agreed to, we shall be shifting Yugoslavia more toward Moscow and more away from the West. By following the procedure recommended by the committee, there will be a chance to keep them moving more toward us.

Mr. FULBRIGHT. I believe that it will have great political significance so far as the future is concerned, not only with respect to Yugoslavia, but also with respect to all countries of Eastern Europe. They do not have such a position now, but I believe it is the policy of all of us that it is to be hoped that sooner or later the relations of those countries with the Kremlin will be loosened. If there is any way in which that can be accomplished, it is through the developing of some trade with them. Mr. MANSFIELD. How much of the How much of the trade of Yugosalvia is now with the West? I believe the figure is 70 percent.

Mr. FULBRIGHT. The trade of Yugoslavia with the West is now between 75 and 80 percent. Most of that trade is with Western Europe. Our trade with Yugoslavia is not great.

Mr. MANSFIELD. That is correct. As I understand the situation, if Yugoslavia is not given the most-favored-nation treatment-which is not a special privilege-the trade perhaps will change to a formula of 30-70, going in the other direction.

Mr. FULBRIGHT. Yugoslavia could be forced into that position.

We can look at the list of products involved, and the shift in the amount of tariff which would be involved. They could not possibly compensate for that could not possibly compensate for that tariff.

There are many other people who are interested. I did not wish to bore the Senate by listing them all.

Considering that such a large jump would be involved, it would be quite unusual if Yugoslavia could sell anything, usual if Yugoslavia could sell anything, under that kind of burden.

Mr. LAUSCHE. First, I should like to make a statement.

By granting the most-favored-nation treatment, we are helping to perpetuate the Communist government in Yugoslavia. We are enabling that government to compete with our workers, with our manufacturers. We are giving encouragement to socialized operations, through contributions made by the businesses of the United States and the workers in the United States.

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

Mr. LAUSCHE. I yield.

Mr. SYMINGTON. We are the bankers of freedom in Europe, the Middle East, and the Far East; and if all our allies are trading, to the extent that they actually are trading-for example, Canada, a half billion dollars of gold in the sale of wheat to Communist China; a half billion dollars of gold for the sale of wheat to Russia-how can we continue a situation where we continue the banking of the physical defenses of the free world unless we allow our private enterprise companies to trade with Communist countries on a basis at least reasonably comparable to that of our friends and allies?

Mr. LAUSCHE. Frankly, I I have never subscribed to the philosophy or the principle that because somebody else does a thing which I believe is wrong I am justified in doing it. If we look at the facts, since World War II we have followed a policy of not giving aid in the perpetuation of communism by dealing with such countries.

Mr. SYMINGTON. We are not talking about aid now. We are talking about business trade. Mr. LAUSCHE. We are talking about dealing with them.

Mr. SYMINGTON. Yes. The next question I ask relates to our continuing to lose a great deal of gold. Most people believe this loss of gold gives us an increasingly serious problem, as

the floor.

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

Mr. LAUSCHE. I yield to the majority leader.

Mr. MANSFIELD. Mr. President, I wish to reinforce what the distinguished chairman of the committee [Mr. FULBRIGHT] and the distinguished Senator from Illinois [Mr. DOUGLAS] have said. This procedure does not extend a preferential treatment. What has happened, in effect, is that a repository has been carried over from the time of the AustroHungarian Empire, in the latter part of the last century. The later repository was the Government of Serbia, for the Government of Yugoslavia.

That really is not of great importance, except politically. If this procedure

the trade of Czechoslovakia, Bulgaria, and Rumania is completely oriented to the Soviet Union. That is what we would drive Yugoslavia into doing, if we were to take away the little inducement provided to keep some link with the West. I can think of nothing which would be more disastrous in terms of holding onto Central Europe and nothing which would be more helpful to Khrushchev than driving Yugoslavia exactly where economics has taken Czechoslovakia, Bulgaria, and Rumania. Once driven there, they will stay, because of the need for parts and machinery and all other things. The umbilical cord cannot be cut, once the direction is changed.

member, the figures are some $3 billion for offshore military expenditures in the banking of freedom, plus at least a billion dollars in aid. This gives a net unfavorable balance of $4 billion for those two categories plus a tourism unfavorable balance of $22 billion. That is some $6 billion-plus of an unfavorable

balance of trade to start with. If this unfavorable balance continues, we automatically continue to lose gold.

If we do not permit our American private businessmen to trade with these countries, and our allies trade with them to their hearts' content, I do not see how we can do other than increase this serious unfavorable balance of payments. The latter, of course, cannot go on indefinitely, because our currency is expressed in gold and backed by gold.

Mr. LAUSCHE. I have read the arti

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

have a preponderance of exports over imports-let us say from Yugoslavia. None of the writers has pointed out that in

Mr. SYMINGTON. Mr. President, will the Senator from Ohio yield to me?

ports we do not include only the goods sold for dollars but also include Public Law 480 sales as if dollars had come in.