role in the free commercial life of the free world. Given a chance, the prospect is that they will liberalize their economy as fast as their improving balance-of-payments position permits and will become a useful member of GATT. Yet today the Yugoslavs are beginning to wonder whether they have a commercial future with the West. They are not members of the European Common Market, and the establishment of a common external tariff may prove a serious impediment to the expansion of their traditional trade with the Community countries. If we add more pressure on their economy by severely restricting access to our market for their exports, we shall be reinforcing the argument of the Soviet Union that independence from the bloc does not pay. The Department feels there are hopeful signs of movement within several of the satellite countries and that it is important to encourage this movement. But we shall be severely limited if the United States forecloses the Western option for Yugoslav trade and creates an economic climate which compels the Eastern European countries to seek their commercial opportunities with the bloc. DEPARTMENT OF STATE, October 1963. MOST-FAVORED-NATION PROVISION IN The foreign aid bill contains a most important provision amending the Trade Expansion Act of 1962 to allow restoration of nondiscriminatory trade (most-favored-nation treatment) for Yugoslavia and Poland. This amendment was approved with bipartisan support by the Senate Finance Committee as well as the Foreign Relations Committee. It would not, of course, change existing law prohibiting trade in strategic materials. Senate approval of the pending provision is sought for several important reasons: 1. Trade, not aid: Nondiscriminatory trade with these two countries will allow the United States to carry on its strategic objective of seeking to turn them increasingly toward the West. This will be done through commercial ties based on the free interplay of market conditions in which the United States is strong and which we have traditionally believed will lead to a more open society. The opportunity for business transactions with Yugoslavia and Poland on the same basis as with other nations will allow the United States to continue to strengthen our relations with those two countries while shifting from aid to trade. Existing AID projects in Yugoslavia are being brought to a conclusion, and no new ones started except assistance financed principally from available Public Law 480 funds in connection with the Skopje earthquake. No AID projects have been undertaken in Poland except for a children's hospital in Krakow. Public Law 480 sales of surplus agricultural commodities will still be possible; but the increasing emphasis will be on commercial trade. 2. Increasing Western economic ties: Both Yugoslavia and Poland have repeatedly demonstrated their desire to expand commercial ties with free world countries. While Poland is part of the Communist trade bloc, it has persistently sought to expand its trade and ties with the West, thereby loosening its dependence on the Soviets. Poland now carries on over 35 percent of its trade with free world countries. Yugoslavia has come to have about three-fourths of its foreign trade with the free world and ever since the break with the bloc in 1948, it has been moving away from centralized direction of its economy toward a system in which market forces play a dominant role. Since 1961, it has begun a major series of reforms to integrate its economy with the world market and has adopted a provisional system of tariffs based on the Brussels nomenclature. To deny most-favored-nation treatment will likely curb the efforts of these two countries to strengthen their Western economic ties. Over 90 percent of the total value of Yugoslav exports to the United States would be subject to sharply increased rates of duty if most-favored-nation treatment is withdrawn. About 15 percent of Poland's trade with the United States would similarly be affected. 3. Debt repayment to the United States: The ability of Yugoslavia and Poland to repay indebtedness to the United States would be seriously impaired if needed sources of foreign exchange are denied by curbing their trade with this country. Yugoslav obligations during the next several years will run in excess of $10 million annually. Poland's debt repayment obligations to U.S. citizens whose property was nationalized amounts to almost $11 million annually, and within the next few years the obligation will be in excess of $13 million per year. The obligation will increase in 1967 to over $20 million when the first payment in dollars for Public Law 480 transactions falls due. The capacity to pay these dollars to us depends on their ability to obtain dollars, and trade earnings are the source. 4. Historically established: Most-favorednation treatment for Yugoslavia goes back to an 1881 treaty; and most-favored-nation for Poland was authorized by President Eisenhower in 1960. Denial of most-favorednation treatment for the two countries will be a serious psychological as well as financial blow and will inevitably force both countries to turn more to the East. 5. Strategic significance for the United States: The fact that efforts to win Yugoslavia and Poland toward the West can have significant effect is best indicated by the improvement in U.S. relations with the two nations through past steps and by the major role both countries have played in splintering the Communist bloc. For example, in 1958, when Yugoslavia split with the Soviet Union and U.S. assistance was extended, Greece was a battlefield for guerrilla warfare supported by Yugoslavia and other eastern European countries. Czechoslovakia only a few months before already had fallen victim to Communist aggression. Bolstered by the expanding Soviet presence on the Adriatic, the large Communist parties of Italy and France were increasingly aggressive in seeking to undermine the governments in those countries. Soviet-Yugoslav break in 1948, followed promptly by U.S. aid to Yugoslavia, cut off the Soviets from direct access to the Mediterranean. Yugoslavia sealed off its border The to guerrillas operating in Greece and this allowed Greek forces to concentrate on a contracted battlefield where they quickly moved to victory. Yugoslavia became a buffer zone for NATO, especially Italy, allowing the Italian Government to concentrate more on internal problems. The Trieste problem was also promptly settled. Rapid reduction of U.S. aid to Europe was facilitated by these developments. developments. The more long term consequence has been the embittered squabbling and splintering within the bloc set off by Yugoslavia's unyielding insistence on independent nationalism. This has led to the end of the myth of monolithic Communist invincibility and a shift of underlying power toward the free world. Poland, as a member of the Warsaw Pact, has of necessity played a more limited role. It has nevertheless served as a model for the other bloc countries in their recent tendency to exercise increased autonomy in internal affairs and to broaden relations with the West. The degree of freedom of religion and speech among the Polish people, the more satisfactory agricultural results achieved fol lowing the reversal of that country's collectivization policy, and Poland's special relationships with the West have all been watched intently by other Soviet bloc countries and noted with particular interest by their peoples. General Eisenhower (quoted in "First Hand Report," by Sherman Adams): "I am a little old-fashioned," (Charles) Wilson said, "I don't like to sell firearms to the Indians." Eisenhower turned on Wilson quickly and said, "You should say first what trade is, and what it is doing. Suppose you couldn't make a single firearm without raw material out of the enemy's country. The last thing you can do is to force all these peripheral countries-the Baltic states, Poland, Czechoslovakia, and the rest of themto depend on Moscow for the rest of their lives. If you trade with them, Charlie, you've got something pulling their interest your way. You immediately jump to guns and ammunition. I am not talking in those terms. It must be selective. You are not going to keep them looking toward us and trying to get out from under that umbrella unless you give them something in the way of inducement to come out. You just can't preach abstraction to a man who has to turn for his daily living in some other direction." ILLUSTRATIVE BACKGROUND ON CONDITIONS IN In Yugoslavia, English has replaced Russian as the most widely taught language in the country; American and West European books are freely available at bookshops. American films are by far first in number shown each year; Voice of America broadcasts are unjammed; the U.S. Information Service is permitted to carry out a program on a greater scale than in any other East European country; American and West European newspapers and magazines are sold on the newsstands; the New York Times and Herald Tribune are taken by some 70 libraries. American plays are translated and performed regularly. Yugoslav intellectuals have been in close contact with American authors, sociologists, scientists, educators and economists. In Poland, Voice of America broadcasts are unjammed; U.S. Government magazines distributed; American films, books, and commercial magazines circulated; American teachers and lecturers brought to Polish universities; and large exhibits of American products and American accomplishments shown at the Polish international trade fair each year. Farming in Poland and Yugoslavia is now largely private and the ruthless drive toward collectivization has been reversed. Socialization of arable land in Eastern Europe (collectives and state farms)—see table below: 1953 attempted to "normalize relations" between church and state. It provided for state assistance to the religious communities, the operation of theological seminaries, the reemergence of a religious press. Internal autonomy was guaranteed, interference with religious services prohibited, and the ban removed from church rites following civil marriages. Archbishop Stepinac was released from prison in 1951, and, until his death in 1960, was a focal point of hostility between the Roman Catholic Church and the Communist regime. Relations between the Roman Catholic Church and the Yugoslav Government have since improved; channels of communications have been established at local, provincial and federal levels; and Catholic prelates have been issued exit papers without difficulty for visits to the Vatican. The basic problem involved in churchstate relations in Yugoslavia the incompatibility of Communist ideology and religion-remains unresolved; but, before 1949, when U.S. assistance arrived, religion was treated with the full range of strong-arm attacks and other police state methods. Today the regime is seeking to regularize its relations with religious groups, and to improve general church-state relations. is being attempted without, however, giving up basic Communist principles and objectives. This In Poland, freedom of religion had been under severe Communist repression and is still embattled, but has made meaningful strides: Catholics (who make up 95 percent of the population) enjoy basic freedom of worship. The church maintains a nationwide program of religious education for children as well as a Catholic university and semiCardinal Wyszynski, Polish primate, and many of the Polish bishops have recently traveled to the Vatican on several occasions in connection with the ecumenical council and the conclave. The Government treats a number of religious holy days as national holidays. The following description of a church service is taken from an eyewitness report in Newsweek magazine (June 18, 1962): "In Warsaw, in the darkened Church of the Holy Cross, a young priest has just finished reading Stefan Cardinal Wyszynski's pastoral letter urging the faithful to fight atheism, materialism, and the corruption of youth. "'And now,' the priest intoned, 'repeat after me: We pledge to thee, Holy Mary, Queen of Poland, that we shall fight the evil forces of atheism and materialism, and that we shall protect our youth. So help us God.' "The congregation, kneeling in the pews, in the aisles, and on virtually every inch of the floor, solemnly repeated the pledge." FREEDOM OF SPEECH AND THE PRESS In Yugoslavia, freedom of speech and the press is limited, but has changed drastically since Yugoslavia was part of the monolithic Soviet bloc. The author of the widely known anti-Communist books, "New Class" and "Conversations With Stalin," Milovan Djilas, is in jail, but his books came out of the present intellectual ferment in that country. The overwhelming majority of Yugoslav writers within the system have experimented relatively freely and with comparative lack of interference in their work. Yugoslav newspapers publish more straight news and more balanced news than those in any other Communist country, and they subscribe to AP, UPI, and the New York Times service. Foreign correspondents are not censored and they are free to report what they can find out. Eyewitnesses attending local area meetings report sharp and outspoken criticism of the regime, especially in regard to economic and social plans, and to execution of previously approved projects. In local government meetings, greater participation by the public and by locally elected officials is increasingly encouraged, and the opportunity for expressing opinions and attitudes toward local problems is increasingly utilized. In Poland, freedom of speech and the press is limited but contrasts sharply with conditions when Poland was fully under Soviet control: "I agree to the present state of affairs on condition that our children's freedom will be greater, not less. We talk of competing with the West. This competition cannot be purely economic. It must also extend to the field of rights, to the field of freedom." (Polish Scientist Leopold Infeld, in Przeglad Kulturalny (Warsaw), November 23, 1961.) At the end of 1961, Polish pollsters found their teachers read Western novelists. Of 220 primary school teachers questioned, not one had mentioned a contemporary Polish or Soviet novel. Secondary school teachers listed Hemingway, Camus, and Steinbeck as most frequently read, and in an expanded list did not include a single Communist writer. Radio Warsaw, reporting these things, complained that children praised the capitalist system in their school essays, and that even those that defended socialism were unable to state points of superiority. Trade and aid data-U.S. exports of domestic merchandise to Yugoslavia for 1962 (selected commodities) COMMODITY GROUP AND SUBGROUP DESCRIPTION Animals and products, edible: Subtotal.. Animals and products, inedible: Furs and manufactures---- Animal and animal products, inedible__ Subtotal_ Vegetable products, edible: Fruits and preparations.... 323, 068 7,500 630 5,551, 401 1, 199 Metals and metal manufac 14, 705 tures: 347, 102 1,290, 442 Cocoa, coffee, tea, and substitutes. Spices_ 5, 199 3,048 3, 091 53, 735, 700 Sugar and related products.. Subtotal__ Vegetable products, inedible: Rubber and manufactures, exclusive of sc 2-----Naval stores, gums, and resins___ Vegetable oil, fat and wax, crude___ Nursery and floral stock.. Tobacco and manufactures__ Miscellaneous vegetable prod ucts, inedible___. Subtotal__ 741, 006 21, 230 8, 297, 505 3,534 1,072, 754 41, 540 10, 177, 569 Metal mfrs_-_-_ Alum ore, etc, & semfab form__. Copper base alloy and semfab form__. Nickel ore, etc, & sfab form__ Tin ore, etc, & semfab form.. Nfer ore, etc, & sfab f, nec___ Prec mtl & plated ware, nec__ Subtotal__. Machinery and vehicles: El mach and app except sc 2__ Power generating mach. nec--. Constr. excav. and mining mach... Mtl ctg mach. tools ex sci____ acc-- 121, 220 85, 945 992 17, 162, 158 3,583, 225 2,313,956 1,955, 894 1,991, 209 111, 248 8, 308, 061 Trade and aid data-U.S. exports of domestic merchandise to Yugoslavia for 1962 (selected commodities)-Continued Value (dollars) Chemicals and related products Coal tar and products, ex. sc. nishes___ Soap and toilet preparations. Subtotal Miscellaneous: Photo proj. goods ex. sc. 1---Sci. and prof. eq. nec. ex. sc. 1_ Musical instruments pts. and acc--- Miscl. office supplies- Poland Continued million at the current exchange rate, was 1962 U.S. exports of domestic merchandise to made available for relief and construction from Yugoslav currency holdings available for U.S. use. 17,484 1,538, 779 1, 435, 549 446, 850 var 165, 681 2,227 Fresh fruits (pounds) -- 3, 606, 570 Canned fruit and juices (pounds) -- 317, 711 1, 330, 137 36, 256 19, 982 Value (dollars) Animals and products, edible meat and meat products-‒‒‒‒ Hides and skins, raw, ex furs (inedible) ---‒‒‒ Machinery & vehicles: El mach & app except sc 2---- Subtotal___. Chemical and related products: Chemical and related products- Soap and toilet preparations. Subtotal_ Miscellaneous: Value (dollars) 237, 509 45, 295 220, 583 246, 943 13, 211 1,864, 756 79, 478 186, 539 34, 004 17,758 7,081 18, 845 23, 648 7,700 3,000, 350 50, 895 850, 622 76, 728 86, 670 1,377 828 1,067, 120 Subtotal__. Yugoslavia, total------- 154, 081, 264 Total U.S. exports to and imports from Yugoslavia Current U.S. assistance to Yugoslavia is almost exclusively in the form of surplus agricultural commodities under the Public Law 480 program. The last loan from the Development Loan Fund of the Agency for International Development was made in the fiscal year 1961. Grants from the Agency for International Development amounted to $3.3 million in fiscal year 1961, $0.5 million in fiscal year 1962 and $0.1 million in fiscal year 1963. The fiscal year 1963 grant was made from funds authorized by the Congress to complete orderly phasing out of prior year AID activities. Under title I of the Public Law 480 program the United States sells surplus agricultural commodities to Yugoslavia for Yugoslav currency. Ten percent of the sales proceeds are reserved for U.S. uses, and the remaining 90 percent is made available to the Yugoslav Government, principally in the form of loans, for economic development projects. The United States is also selling commodities to Yugoslavia on 15-year dollar credit terms under title IV of Public Law 480. Under title III of Public Law 480, surplus agricultural commodities are provided to support U.S. private relief agencies operating in Yugoslavia, such as CARE, Church World Service, and Lutheran World Relief. As a result of the disastrous earthquake which virtually destroyed the city of Skopje, Yugoslavia, on July 26, 1963, the United States has provided emergency relief assistance consisting of medical aid and supplies, blankets and cots, shelter, food and transportation services. In addition, 37.5 billion dinars in U.S. holdings, equivalent to $50 Grains and preparations_____ Subtotal_____ Vegetable products, inedible: Subtotal_-. Textile fiber and manufactures: Subtotal_ Wood and paper: Sawmill products.. Subtotal_ Nonmetallic minerals: Subtotal_ Metals and metal manfacturers: Ir & stl mill prod roll & fi---Castings and forgings_‒‒‒‒‒ Metal mfrs. excl of sc 1-----Alum ore, etc. & semfab form.. Nfer ore, etc. & sfab f, nec____ Subtotal.. 43, 930, 624 123, 025 3, 800 10, 190 3,245, 588 18, 264 940 47, 332, 431 [A public affairs reprint, Agency for International Development, Department of State, Washington, D.C.] POLAND? YUGOSLAVIA?-WHY HELP (By Christian A. Herter) Emotion is rarely a reliable guide to sound policy decisions. Yet all of us are tempted at one time or another to speak out or act in anger against situations not to our liking. More often than not, we discover anew that we cannot end our troubles merely by opposing them. In the conduct of international relations, we are far more likely to achieve our goals by careful planning and the quiet and skillful use of diplomatic tools than by harsh words and hasty decisions. A case in point is our relationship with the countries of Eastern Europe. Few of the numerous problems that confront us in the world generate more frustration or arouse more controversy than this. Many of us, and more of our ancestors, came from that arc of states that runs through the heart of Europe from Poland to Rumania. It distresses us to know that most of the people now living in those countries are ruled by regimes they neither approve of nor respect. We blame ourselves, in part, for not successfully opposing their absorption into Moscow's empire. And we find it galling that we can do so little now to promote their freedom and independence. Against this background of concern and frustration, it is not at all puzzling that we should occasionally lash out at the Commu nist rulers and all their works, that we should seek to end or prevent any action on our part that might lend them comfort or prestige. This feeling was reflected most recently by the action of the Senate in voting to ban any assistance to countries "known to be dominated by communism or Marxism." This sweeping restriction was modified the following day by a second amendment to the Foreign Assistance Act, sponsored jointly by the Democratic and Republican leadership in the Senate, which permitted the use of surplus agricultural products for foreign assistance in some circumstances. Even so, the surplus products are not to go to any country "participating directly or indirectly in any policy or program for the Communist conquest of the world" or to one that is "controlled by any country promoting the Communist conquest of the world." At almost the same time, the Ways and Means Committee of the House was sending to the floor a foreign trade bill that would exclude Poland and Yugoslavia from mostfavored-nation treatment under our system of tariffs. These actions in the Congress sought to reverse policies followed by three administrations, two Democratic and one Republican, for a dozen years and more. I am certain that the frustrations mentioned earlier played an important part in these actions. Also at work was the feeling that the assistance given Poland and Yugoslavia in recent years had produced no tangible results from the point of view of our interests. There was understandable irritation that Polish and Yugoslav leaders frequently criticized the United States but not the Soviet Union. Some legislators argued that it made no sense for the United States to go out of its way to ease the economic problems of Communist regimes. "I am not able to understand how we would help people to get free by making their tyrant masters stronger," one Senator said during debate on the foreign assistance amendment. It was a question that many Americans have asked themselves. Why should we help a Communist government? The first and most obvious answer is that our policy is not designed primarily to help governments but rather to help the unfortunate people of the countries concerned. That it helps the governments, we recognize, of course. But for any realistic judgment, we need to look at the total effect, not merely the most obvious one; the subtle and indirect consequences of action are frequently more important than those readily discernible. For a fuller answer, we must know just what it is that we have done to assist Poland and Yugoslavia. We should consider the reasons that convinced Presidents Truman, Eisenhower, and Kennedy that such aid was in the security interests of the United States. Finally, we should study the results of this policy. Only then can we judge whether the course we have pursued has produced useful results, and whether it should be continued. In the years immediately following World War II, Yugoslavia was probably the most militant and extreme of Moscow's recently acquired satellites. That very extremism created problems. Tito, in those days, was, if anything, more Stalinist than Stalin himself and his militancy created intrabloc problems of discipline and control. Stalin sought to take over the Yugoslav party from within. When that failed he engineered the exclusion of Tito and his followers from the Cominform. The Soviet dictator calculated that without his support, the Yugoslav Communists would quickly be brought to heel. He was wrong, and it proved to be one of his most serious blunders. For Tito had broken the so-called monolithic unity of the Communist bloc, the winds of nationalism and independence began to blow, and their erosive effect on Mos cow's control have become increasingly in 1956, revolt against blind acceptance of apparent. Yugoslavia's break with Moscow and its pursuit of an independent course produced significant political and strategic advantages for the United States and the rest of the non-Communist world. Soviet power was rolled back from the Adriatic Sea and from Italy's northeastern border. Austria's southern boundary was freed from Moscow's control. The closing of Yugoslavia's borders to Greek Communists sounded the death knell for the latter's effort to win over Greece. Other consequences flowed from Yugoslavia's independent course, to the obvious advantage of both the Yugoslavs and the West. The pace of development accelerated and living standards rose. Foreign trade increased and more than two-thirds of it was with nonbloc countries. Cultural and technical contracts have grown and new bonds of friendship have been established. Over the past decade, thousands of westerners have visited Yugoslavia and come to know firsthand that country, its progress and problems, and its intelligent, able, and fiercely independent people. And many Yugoslavs have been able to see the West and to compare its reality with the propaganda stereotypes. We know that the present course has been welcomed by most young Yugoslavs and by broad segments of the population at large. We should harbor no illusions, however, as regards the present political leadership and its basic Communist orientation. Nonetheless, President Tito is a proud and independent man, and he is a Yugoslav. However much he might welcome readmission to the bloc, he is not likely to consider it on terms of less independence than he demanded in 1948. And from Moscow's viewpoint, such a demand could only stimulate the forces of nationalism which already have caused the Kremlin incalculable trouble. The danger in the present situation is that a drastic revision of U.S. policy along the lines of the proposed Senate amendment would sharply reduce Yugoslavia's freedom of choice. A harsh stiffening of our policy and a modest softening of Moscow's might convince the men in Belgrade that they had only one road open to them. The hand of those who all along have favored a reorientation of Yugoslav policy in the direction of closer ties with Moscow would be incredi bly strengthened; those whose orientation has been toward the West would be left with few effective arguments or defenses. In testimony before a House committee Rusk said: "We believe the question answers earlier this year, Secretary of State Dean itself as to whether we would prefer that the Yugoslavs fall back into dependence on the Soviet bloc and thus reorient their country toward the East. We are convinced that the present policy, supported by three administrations and fully tested by time and events, is effective and in the interests of this country." There are elements of both similarity and considerable difference in the situations in Poland and Yugoslavia. Like the Yugoslavs, the Poles are a proud and independentminded people. But they are also realists and they know that their geographic position creates special problems for them. Bordering the Soviet Union and athwart the main lines of communication between the Soviet state and East Germany, Poland knows that any overt moves in the direction of a rupture with Moscow would produce the most severe kind of repression. It does not enjoy the kind of relative isolation from the Soviet Union that made Yugoslavia's break with Moscow possible. During the first decade after World War II, Poland's Communist leaders were docile followers of Stalin and careful executors of his policies. American policy toward the Warsaw regime paralleled that toward the other members of the Soviet bloc. But Soviet pattern erupted in Poland. Wladyslaw Gomulka, who had been jailed by the Stalinists, assumed power on the crest of this Poland-first demonstration. The new Polish leader had to walk the narrow ledge between his basic loyalty to Moscow and to Marxism-Leninism and his comprehension of the demands of his own people for liberalization and more freedom. Forced collectivization of farmlands was halted. Pressures on the Catholic Church were reduced. Limitations on contracts with the West were relaxed and the Warsaw government moved to improve its long-neglected relations with nonbloc countries. As we watched these developments from Washington, we concluded that they should not pass unnoticed. In October 1956, the late Secretary of State John Foster Dulles declared: "The captive peoples should never have reason to doubt that they have in us a sincere and dedicated friend who shares their aspirations. They must know that they can draw upon our abundance to tide themselves over the period of economic adjustment which is inevitable as they rededicate their productive efforts to the service of their own people, rather than of exploiting masters. Nor do we condition economic ties between us upon the adoption by these countries of any particular form of society." A few days later, President Eisenhower said: "The United States has made clear its readiness to assist economically the new and independent governments of these countries. We have already-some days since been in contact with the new Government of Poland on this matter. We have also publicly declared that we do not demand of these governments their adoption of any particular form of society as a condition upon our economic assistance. Our one concern is that they be free-for their sake, and for freedom's sake." Since 1957, these expressions of interest and support have taken the practical form of credits and deliveries of surplus farm products. There has been a significant and fruitful growth in technical and cultural exchanges. Thousands of Americans and Poles have come to know each other well, whether as official visitors or as tourists. Well-known Americans, such as former Vice President Nixon, who have visited Poland, have been overwhelmed with the warmth and friendliness of their reception by the Polish people. The Poles know that economic assistance from the United States has helped to raise their standard of living. They know that grain imports from America have permitted their farmers to concentrate on other agricultural products that earn hard currency on world markets. Their farm situation, the best by far in the Soviet bloc, has enabled them to resist pressures for tighter controls and possibly a revision to the hated collectivization. They know, too, that help from the United States has permitted the Government in Warsaw to steer a course freer of dominance from Moscow than would otherwise have been possible. There have been reports lately of discouraging developments within Poland that we can only read with regret. New pressure is being exerted against the Catholic Church by the government. The authorities have expanded controls over the press and the schools. Nevertheless, the Polish people enjoy a measure of freedom unknown in any other bloc country. And Polish farmers still own more than 85 percent of the land under cultivation, whereas in other bloc countries that percentage or more is under the stultifying hand of collectives. Nor has Gomulka surrendered his views on the right of each state to determine and follow its own road to socialism without being rigidly tied to the Soviet model. Following the 22d Soviet Communist Party Congress last fall, Mr. Gomulka in his report said: "Every party is fully independent and autonomous and bears full responsibility for the country it rules and for its policy in the country." There is evidence of many other significant differences between the views held in Moscow and those dominant in Warsaw on both domestic and foreign issues. While the Soviet Union has been stressing the desirability of expanding intrabloc trade, Poland has been establishing a privileged sector of industry producing primarily for Western markets. As we look at these and other facts of life inside the Soviet system, it is more important than ever for us to distinguish between the myths and the realities. This is particularly vital as we consider our policies toward Yugoslavia and Poland. The basic objective of our policy in both countries has been to encourage their independence and freedom for their people. Critics of the course we are and have been following tend, I think, to regard the public statements of Tito and Gomulka on foreign policy matters as the only valid evidence of what is happening in their two countries. Each expression of friendship for Moscow is read as a sign of our own failure. Those who would have us turn our backs on those most friendly to us in Poland and Yugoslavia seem surprised to discover with some regularity President is to have available to him the authority to extend or not extend assistance at times and places where the available evidence indicates that such action would promote our own national security interests. It is also a matter of our overall posture toward peoples now living under unwanted Communist rule. If they and their governments know they cannot count on us for urgently needed help, they will suit their actions and their policies to fit that fact. If they realize that such help might be forthcoming in certain circumstances, their actions could be quite different. Two years ago, as Secretary of State, I expressed my views on this matter in a speech to the American Bar Association in Washington. I said then: "We have tried to encourage any trend toward greater freedom within the Communist bloc. We aided Yugoslavia, whose break with the bloc compounded the difficulties of maintaining monolithic Soviet control over the remaining Eastern European states. We are helping Poland. We have sought through exchange programs and other personal and cultural contacts to broaden the exposure of the Soviet people to outside influences. "If we hold to our course, I believe that these trends will continue and will work in our favor. Basically our policy is running with the grain of history." My reading of the situation in which we find ourselves today only reinforces that conviction. Mr. HARTKE. Mr. President, I com long-term credits to South American countries, and in fact concluded such agreements? Mr. FULBRIGHT. I am not informed as to that. Mr. HARTKE. Did he not also make long-term agreements with Bolivia to sell that country machinery? Mr. FULBRIGHT. I am not informed as to that. I have not made a special study of trade with every other country. Mr. MANSFIELD. Mr. President, will the Senator yield? Mr. LAUSCHE. I yield. Mr. MANSFIELD. It is my understanding that Tito did offer the Bolivian Government $5 million. I wish other governments would make loans to some countries and offer aid on a bilateral or multilateral basis, instead of making this country carry the whole burden. Mr. FULBRIGHT. If Tito wishes to trade, I assume, as in the case of every other country, he is trying to trade in every way he can. Mr. HARTKE. Mr. President, will the Senator yield further? Mr. LAUSCHE. I yield. Mr. HARTKE. Is it not true that so far as special favors and Tito are concerned, such favors, or special consideration, or the most-favored-nation treat that Messrs. Tito and Gomulka are still mend the Senator from Ohio for bring- ment, are not being extended to other Communists. Surely this is not the time to walk away from the competition. I can think of few actions on our part that would be more welcome in Moscow than that. If I were Mr. Khrushchev, I would surely heave a sigh of relief if I knew that Poland's and Yugoslavia's windows to the West were being bricked over. Never have the signs of internal disarray been more obvious within the Soviet empire than they are today. Never have the forces of autonomy and independence been more evident. There is a puzzling inconsistency in all of this that we should consider. We have all heard words of warning about the effectiveness of Moscow's penetration of an increasing number of countries through trade-andaid offensives. Yet some of us who seem most alarmed at this intensified competition are among those who would deliberately deprive ourselves of the opportunity to carry on this brand of peaceful competition within the bloc itself. One of our problems, I believe, is our impatience and our desire to find clear-cut and quick answers. Given the complexities of our world, there are few such answers short of devastation. We must gird ourselves for the long, hard pull that this kind of competition requires. The search for shortcuts can drive us into hasty and emo tional decisions that only create new prob lems. A policy of abandonment toward key areas of Eastern Europe would seem to me to be the ultimate in the "no win" policy we hear discussed these days. Its logical outcome would seem to be either surrender or military conflict. Certainly we cannot "win" a competition in which we refuse to participate. And if we hope for internal tension and turmoil as the outcome of our inaction, we must in good conscience be prepared for the consequences of such a development. I doubt that that is what we want. doubt that such an outcome would serve well the interests of freedom or independence of our friends in Eastern Europe. The question of our policy is sometimes phrased as one of aid for Communist governments versus no aid. That is not the real ing the situation to a head. There is no real difference in ideology between these dictators. This man is an oppor tunist. This is the type of opportunism which the Communists work to their advantage. The Senator from Ohio has said that he is going to stand alone. He is not going to stand alone so far as I am concerned. I am going to stand with him. Mr. LAUSCHE. Mr. President, the Senator from Indiana has asked that he become a joint sponsor of the amendment. I ask that his name be added to it and that the amendment be known as the Lausche-Hartke amendment. The PRESIDING OFFICER. With out objection, it is so ordered. Mr. HARTKE. If I am in error, the distinguished chairman of the Foreign Relations Committee is present, and he can correct me. As I read the figures from page 40 of the report, it states that U.S. imports from Yugoslavia in 1962 totaled $48.3 million, and U.S. exports to Yugoslavia were $154.1 million, of which an estimated $131 million were financed by the U.S. Government under AID programs, Public Law 480, and ExportImport Bank loans. According to my computation, $131 million subtracted from $154.1 million leaves $23.1 million, which leaves a deficit balance of $25.2 million. Am I in error? Mr. FULBRIGHT. No; that is correct. It is in the committee report. We were not trying to deceive anybody. Yugoslavia has substantial loans from the International Bank, and it is servicing Yugoslavia's loans. The Senator is correct. That is quite clear from page 40 of the committee report. Mr. HARTKE. Is it not true that on a recent trip to South America, Tito at issue. The central question is whether the tempted to make an agreement to extend Communist countries except Poland? Mr. FULBRIGHT. The Senator from Illinois said there is no special considera tion; there is no preferential treatment over 44 other countries, I think the number is. Mr. HARTKE. What other Communist countries have received such treatment? Mr. FULBRIGHT. Poland and Yugoslavia. Mr. HARTKE. They are the only two Communist countries. Mr. FULBRIGHT. Yes; and previous administrations have found good reason for it. Mr. HARTKE. I am not arguing about what previous administrations did. Mr. FULBRIGHT. No one has insinuated in the slightest degree that both are not socialistic countries. Mr. HARTKE. I heard the distinguished Senator from Oregon say he did not want to cheat America out of this trade. What about the situation as to imported zinc? An application as to zinc was before the Tariff Commission, and the decision was 3 to 2. It was a hotly contested decision. Mr. FULBRIGHT. It amounted to $766,000 with respect to zinc. Mr. HARTKE. That is correct. Mr. FULBRIGHT. That is a very great matter to become excited about. Mr. HARTKE. That is only one. There have been split decisions over and over again. I do not care if we proceed on an equal basis, but how do Communist countries establish their prices? Do they establish them on the basis of cost, as we do? Mr. FULBRIGHT. I do not know how they establish their prices. We do not give them a special price. They have to meet the world price. Mr. HARTKE. They do not have to worry about labor or production costs. |