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three branches of the Federal Government the executive, the judiciary, and the legislative.

Last June 13 I spoke out in this Chamber and cautioned against the king-size salary increases recommended by the President's Advisory Committee. Unfortunately, it appears that the bill soon to be voted on in the House of Representatives for the most part embodies these unrealistic recommendations.

This legislative proposal if enacted into law will cost American taxpayers over $600 million a year. This is only the beginning. History teaches us we may be assured that within the next 2 years another pay increase bill will be requested. Also, as the Federal bureaucracy grows, the price tag for this increase will grow with it.

Frankly, Mr. President, I believe that this proposed legislation would be a fantastic raid upon the Public Treasury. Long ago it was written:

Enter ye the strait gate: for wide is the gate, and broad is the way that leadeth to destruction, and many there be which go in thereat: because strait is the gate, and narrow is the way, which leadeth unto life, and few there be who find it.

The gate to the Public Treasury is wide, and broad is the way. Far too many there be which go in thereat. As Senators of the United States it is our duty to guard this gate and to protect it to the utmost against unreasonable and unwarranted entry.

I cannot in good conscience support the proposed pay raise bill in its present form. It would increase the salaries of Cabinet officers from $25,000 to $40,000 per year, and make comparable increases for salaries of the various and sundry deputy secretaries, under secretaries, assistant secretaries, and administrators some to $38,500 per annum. Then there are substantial raises for the deputy assistant secretaries, deputy commissioners, administrative assistants, executive assistants, and right down the line. These bureaucrats frequently solicit and because of pressing their applications receive these appointments. Frequently, probably almost daily, I am besieged with requests from qualified men and women seeking appointive Federal jobs. I am sure that this is true of other Senators.

We hear the argument that many important positions go unfilled or are occupied by unqualified people because those who are qualified to fill them will not leave private industry for a lower Federal salary. I am sure that this is probably true in some cases. However, I have never seen the results of any study which named names and named jobs that have gone begging or whose functions are not being adequately performed for this reason.

If it is necessary to raise the salaries for 10, 20, 50, 100, or even 1,000 Federal jobs in order to lure competent people, is it necessary at the same time to raise the salaries of all Federal employees for the sake of these few? Frankly, I am tired of this wornout argument. If there are certain Federal positions for which there is proof that a higher salary level is needed to attract competent people, then

let these jobs be named specifically and let specific legislation be enacted to correct the problem.

For years every time a pay raise bill comes before the Congress, we have heard this timeworn argument. I ask my colleagues, is it necessary and fair to the taxpayers to raise the pay of 2,000 second-, third-, and fourth-level administrators in order to obtain 50 qualified first-level administrators?

Regarding U.S. judges it is well known that whenever there is a vacancy on the Federal bench, many, sometimes hundreds, of competent lawyers seek the appointment. There are at most but a few hundred lawyers in our Nation, who, if offered an appointment to the Federal bench, would not accept. Although Although there may be some, it is extremely doubtful that a lawyer would refuse appointment to the Federal bench at $22,500 a year and agree to accept were the salary to be increased to $35,000. I would like to know the name of one man in the Nation who would refuse appointment Nation who would refuse appointment to the U.S. Supreme Court, the highest to the U.S. Supreme Court, the highest honor a lawyer may receive, solely because this position pays $35,000 a year and not $45,000.

It should be remembered that in addition to the prestige and other emoludition to the prestige and other emoluments that accrue to a member of the Federal bench, these judges enjoy their salary as long as they live whether they continue to serve actively or whether they retire following 10 years of service having reached the age of 70. Talk about job security, they have it for life and with all the trimmings.

There are Federal judges today in Ohio and in most other States who have Ohio and in most other States who have reached retirement age and could have retired years ago. Evidently, they do not feel that they are being underpaid not feel that they are being underpaid as many continue to serve actively well beyond the retirement age of 3 score and 10.

Furthermore, the vast body of Federal employees, protected as they are by Civil Service, on retirement receive an annuity which is comparable to the best annuity which is comparable to the best in private industry.

Mr. President, I am also opposed to the $10,000 salary increase for Senators and $10,000 salary increase for Senators and Members of the House of Representatives. However, there is much more merit to a reasonable increase in salaries merit to a reasonable increase in salaries for Members of the Congress than for appointed officials and the judiciary. It seems to me outrageous to propose that the Administrator of some independent agency should receive a salary in excess of that of a U.S. Senator.

The bill pending in the House of Representatives would create a new group of bureaucrats, many hundreds of whom would receive salaries of $38,500 per annum. They are appointed officials. They do not have to spend campaign money to be elected. The cost of campaigning to be elected to the House of Representatives or the U.S. Senate has become terrific, almost beyond comprehension. Furthermore, following election, even though a candidate had political contributions to help him defray the cal contributions to help him defray the cost of campaigning, he should maintain cost of campaigning, he should maintain close relations with his constituents and close relations with his constituents and

wishes to do that. This means frequent travel to his home State. It means maintaining his home there as well as a Washington residence. Contrary to the belief of many people, Senators do not have expense accounts except for transportation costs alone of two trips a year to their home States. Furthermore, I seriously question whether there would be any additional candidates for election to the Congress because of the proposed pay raise. No doubt the same men and women would be elected or returned to the Congress. The fact is that very few men and women of high achievement in private life would refuse appointment or certain election to the Senate of the United States or the House of Representatives.

Another argument which we stantly hear in connection with pay raises is that the Federal Government must be competitive with private industry. Private industry bases its pay scale on profits. Where profits are great, salaries in many instances are supercolossal. I make no complaint about this. However, no such factor governs the Federal Government's payroll. Our Government's only source of income for paying salaries is the taxpayer who, heaven knows, already is bearing a heavy enough burden.

An essential factor the committee has failed to recognize is that the purpose of Government is service whereas the purpose of industry is profit. If the goal is to try to match the pay scale of private industry, then we must accept the fact that this proposed bill is only the first installment, and that future requests will indeed make this present legislation look miserly.

We should realize that the Federal Government can never match the salaries of private industry. We shall always have to rely to a marked degree on many citizens to serve their Government as their lives' work. That is as it should be.

It is fair to say that citizens generally wish public officials to be paid adequately. It would be foreign to our American way of life were Congressmen, for example, to be denied adequate compensation. It would be unfortunate were only men and women born to great wealth, or who had acquired great wealth, able to afford to occupy public office, elective, or appointive. No one wants that. On the other hand in my judgment the House Post Office and Civil Service Committee has reportedly come forth with overly generous and, in fact, outrageously high salary recommendations.

Mr. President, because of my opposition to a salary raid on the Public Treasury at this time, I have received criticism from some on the Federal payroll. It startled me somewhat that one of them, Representative WAYNE HAYS, of Ohio, according to newspaper reports, stated that both Ohio's Senators were not worth the increased salary proposed for Members of the Congress. Mr. President, I ask of the Congress. unanimous consent that pertinent excerpts from an article entitled "HAYS Says Ohio Senators Are Not Worth Pay

Increase," which appeared in the Cleveland Press on October 31, 1963, be printed in the RECORD at this point as part of my remarks.

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

leagues secure committee assignments to their liking.

Representative HAYS asked me to try to have him placed on the Committee on Foreign Affairs, then as now, a blueribbon committee of the other body, I spent time and effort in conferences, and

HAYS SAYS OHIO SENATORS ARE NOT WORTH recommended my new colleague. He

PAY INCREASE

(By Thomas Talburt) WASHINGTON.-Congressman WAYNE HAYS, Democrat, of Ohio, says he understands why both of Ohio's Democrat Senators oppose a congressional pay raise. He says they're not worth it.

HAYS, who's backing a proposed pay boost, said he'll offer an amendment to pay legislators on a sliding scale from $5,000 to $35,000 a year and let each Member decide for him

self how much he is worth.

"If my amendment passes and either Ohio Senator says he's worth more than $5,000, he could be tried for perjury," snapped HAYS.

After placing rather dubious prices on the heads of Senators FRANK LAUSCHE and STE

was later selected for membership on the Committee on Foreign Affairs.

I did my best for him in 1949. It is true that I have not done anything for Representative HAYS lately. He has been a very fine and effective Representative, representing Ohio and the Nation. I understand that his work on the House Committee on Foreign Affairs is outstanding, and that his frequent travels overseas have broadened his knowledge of foreign affairs and have won for him the agnomen, "Ohio's Marco Polo." His most recent trip to London and Paris has been well publicized. Ten Members of the other body made this trip to the In

PHEN YOUNG, HAYS was asked to evaluate his terparliamentary Conference in Paris. own performance.

"I'm worth the maximum," he declared. "I'm sick of demagogs," HAYS added. "There are plenty of people in Congress who will vote against the bill and then be the first in line to get their checks.

Senator YOUNG laughed when told of HAYS' comments, but offered no reply. LAUSCHE could not be reached.

WANTS $35,000

The pay bill approved by the House Civil Service Committee yesterday provides a $10,000-a-year raise for Senators and Congressmen, from $22,500 to $32,500. HAYS is holding out for $35,000.

This article by Tom Talburt, Washington correspondent for the ScrippsHoward newspapers, contains the following specific statements made by Representative HAYS:

Congressman WAYNE HAYS, Democrat, of Ohio, says he understands why both of Ohio's Democratic Senators oppose a congressional pay raise. He says they're not worth it.

HAYS, who's backing a proposed pay boost, said he'll offer an amendment to pay legislators on a sliding scale from $5,000 to $35,000 a year and let each Member decide for himself how much he is worth.

"If my amendment passes and either Ohio Senator says he's worth more than $5,000, he could be tried for perjury," snapped HAYS.

After placing rather dubious prices on the heads of Senators FRANK LAUSCHE and STEPHEN YOUNG, HAYS was asked to evaluate his own performance.

"I'm worth the maximum," he declared.

My first acquaintance with the gentleman from the 18th Ohio District was in January 1949, when he came to Washington as a first term Representative. At that time, I was serving my fourth term as a Member of the House of Representatives and had been elected to membership of the Committee on Ways and Means which is the committee on committees of that body. As a member of that powerful committee, I was assigned the duty of recommending committee assignments for freshman Congressmen from Ohio, West Virginia, Indiana, and Michigan and for Congressmen from those States who desired to make a change of their committee assignments. Of course, I talked with the Democratic leaders of those four State delegations in my endeavor to help my Democratic col

Meanwhile the other body continues in session, but has not acted upon the important administration medicare bill, to call attention to one omission on the part of that body. Unfortunately, because of tax features of this legislation the Senate cannot pass needed hospital and nursing home insurance without social security, commonly termed "medicare," until it is first passed in the House of Representatives.

My Ohio colleague is quoted as having said, "If either Ohio Senator says he is worth more than $5,000, he could be tried for perjury." I will give that statement the charity of my silence. Furthermore, to the evaluation of his own performances and his statement that he is worth the maximum I shall not disagree. Without a doubt he is an expensive and valuable Member of Congress.

Mr. President, I am not opposed to a reasonable pay increase for some Government officials and employees when it can be shown they are deserving of it. Furthermore, although I am opposed to the bill as introduced, I do believe that if it is reasonably amended, it is entitled to consideration.

Furthermore, if salary increases are given to appointive bureaucrats and Federal judges, then the Members of the Congress should receive equal consideration. It is certain that Senators and Representatives can have a much better case made for them for a pay increase than can possibly be made for most appointive officials. There is certainly more justification for a pay increase to Members of Congress than for U.S. judges and all appointive officials except certain Cabinet members.

It appears to me that some provisions in the pay raise bill are really somewhat frightening. Do we want Washington bureaucrats to become America's new economic royalty? I hope that members of the Senate Post Office and Civil Service Committee and all Senators will look long and hard at this legislative proposal long and hard at this legislative proposal should it come to us from the House of Representatives. We should not enter into a race to have public service compete with private industry to determine which is more generous in payment of king

size salaries. We should not make the Public Treasury the private domain of public servants.

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

Mr. YOUNG of Ohio. I am glad to yield.

Mr. MORSE. I should like to bear witness and give testimony to the fact that, in my judgment, the Senator from Ohio [Mr. YoUNG] is worth to the people of Ohio many times his salary, and I hope the people of Ohio will see to it that he continues to serve in the Senate for many more years to come.

Mr. YOUNG of Ohio. I thank the distinguished senior Senator from Oregon [Mr. MORSE]. I shall take my seat feeling very humble over the commendatory statement he has just made regarding me.

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. MORSE. Mr. President, I should like to have the attention of the chairman of the Foreign Relations Committee.

As I said at the beginning of my speech on the pending amendment, No. 306, I hope that any modifications that will make it helpful and stronger, without sacrificing the main objective I have in mind can be agreed upon.

The first Senator to speak to me about that was the Senator from Vermont [Mr. PROUTY]. He said it had been represented to him that my amendment would prevent sales. I said I did not believe it would, but if there were any question about it, it would have to be modified in order to remove any doubts. So, on the basis of that conversation, after I consulted with other Senators, I propose a modification of the amendment, as follows:

(i) No funds shall be made available under this Act on or after the date of enactment of this subsection (except for military sales under section 503) to any economically developed nation, except to fulfill firm commitments made prior to July 1, 1963. The President is directed to make no further commitments for assistance (except for military sales under section 503) to such economically developed nations

Then I drop out of the amendment the language on line 5, page 1, starting with the word "and"

and is directed to terminate such commitments made prior to July 1, 1963, at the earliest practicable time. The President is further directed to report, not later than July 1, 1965, to the Speaker of the House and to the Senate Foreign Relations Committee on the steps which he has taken to comply with this provision.

This I agreed to do because the amendment, in this form, will accomplish the main objective. The main difference between my amendment and the language of the bill as it came from the committee is that my amendment seeks to prevent longtime loans to countries which really do not need loans, countries which are self-sufficient. We should be

making loans to countries that need loans. As the chairman knows, there is concern as to whether the amendment would interfere with the short-term credit loans for sales. Some countries wish to buy equipment, and AID makes them a short-term credit loan. That helps in regard to the balance-of-payments problem, and that is why I redrafted the amendment. But as to the other loans, as the chairman pointed out to me in a conference with him, they are not making such loans now. They have in the past. Of course, they could in the future. I just cannot believe-and that is why I make the legislative history-that they would return to making the other type of loan in view of the language in the bill as reported by the committee and the debate we have had on the subject matter.

The chairman of the committee ought to know we have been trying to work out an amendment that would be acceptable. Mr. CHURCH. Mr. President, will the Senator yield?

Mr. MORSE. I yield.

Mr. CHURCH. First, let me say that we do, indeed, share a common objective. I think it is shared by the distinguished chairman of the committee as well. That objective is to put an end to the AID program to rich and fully selfsufficient countries. To that end, the To that end, the committee adopted an amendment I offered for I have long been interested in eliminating this defect in the foreign aid program-which appears on page 47 of the committee print, beginning on line 15, and reads as follows:

No assistance shall be furnished on a grant basis under this Act to any economically developed nation capable of sustaining its own defense burden and economic growth except (1) to fulfill firm commitments made prior to July 1, 1963, or (2) additional orientation

and training expenses under part II hereof during fiscal year 1964 in an amount not to exceed $1,000,000.

The two exceptions seemed highly desirable; the first, because we must honor our prior commitments, since the United States keeps its word; and the second, because we deemed it wise to permit a year's time within which to transfer the orientation and training courses from the foreign aid program into the military budget, where they properly belong. This language allows for transition period during which the change in budgeting procedures can be accomplished.

I think it is very important that the Senator from Oregon is making legislative history on the question of long-term economic loans. I understand it to be the policy of this administration not to extend such long-term loans to rich countries. However, I think it should be made perfectly clear that it is the intent of Congress also that no further longterm loans should be made to countries fully capable of furnishing their own capital.

So I commend the Senator from Oregon for the legislative history he is making. But we should be careful to make certain that short-term credits are not foreclosed, because today we are exporting abroad, for cash or short-term credit, a billion dollars worth of military equip

ment and supplies, which is very imment and supplies, which is very important to our adverse balance-of-payments problem. We do not want to cut ments problem. We do not want to cut off the very countries which are the principal purchasers of American military equipment and supplies.

I think we can accomplish our common objective-and I have consulted the Senobjective-and I have consulted the Senator from Oregon, who has been most cooperative in trying to arrive at a satiscooperative in trying to arrive at a satisfactory formula-by holding to the lanfactory formula-by holding to the language which I offered, and which the committee adopted, but borrowing from the amendment, as modified, that is now pending, offered by the senior Senator pending, offered by the senior Senator from Oregon, that language which defrom Oregon, that language which defines an economically developed nation, fines an economically developed nation, making one change.

The suggestion I make is that beginning on page 47, following the figure "$1,000,000" on line 21, we add the following paragraph:

As used in this subsection, the term "economically developed nation" shall include, but need not be confined, to any nation listed as an exception to the definition of "economically less developed nation" contained in United Nations General Assembly Resolution 1875 (S. IV) and, in addition, the German Federal Republic and Switzerland.

For the information of the Senate, I may say that the nations listed in the cited United Nations General Assembly resolution include all of the clearly selfsufficient, recovered, prosperous nations that both the Senator from Oregon and

the Senator from Idaho wish to strike from our foreign aid list.

I think, with the legislative history that the Senator from Oregon has so ably made, this addition, by more clearly defining the countries we have in ly defining the countries we have in mind, but leaving it open for the addition of other countries that may become self-sufficient in the future, will accomplish our objective, and improves the language the committee has adopted with this objective in mind.

I would suggest to the Senator from Oregon that he join me in offering this language as a substitute for the amendment now pending. I am hopeful that the distinguished chairman of the committee will accept this addendum to the language which the committee previously approved.

Mr. MORSE. I will join the Senator from Idaho in offering the amendment as a substitute for my amendment. It accomplishes our main objective. The accomplishes our main objective. The legislative history makes clear to the administration our attitude. administration our attitude. We hope there will not be a reopening of longterm economic loans which are no longer being made. being made. Also, it will serve notice on the administration that Congress hopes something can be done with regard hopes something can be done with regard to some of the commitments already made, although we have to keep those commitments if we cannot reach an understanding in those instances where derstanding in those instances where understandings are due. Many of these countries, for example, are not keeping their United Nations commitments.

Furthermore, as the chairman of the committee knows, in committee many of us have expressed from time to time our views about having to put money into infrastructure in Europe; but we are committed to it. are committed to it. I do not know how

we can reach that problem. We should not be paying for infrastructure in France France or any other self-sustaining nation.

Perhaps this history will be helpful to the administration in connection with some of its diplomatic economic relations with those countries.

Therefore, I shall be glad to join the Senator in offering the proposal as a substitute for my amendment, if the chairman is willing to take it to conference.

Mr. FULBRIGHT. Mr. President, I am quite willing to take it to conference. I think it is a very good substitute. I am sure it will be agreeable to the other members of the committee. I am glad to accept the substitute.

Mr. CHURCH. I thank the Senator. Mr. President, on my own behalf and that of the Senator from Oregon, I send to the desk a substitute amendment, and ask that it be read.

The PRESIDING OFFICER. Does the withdraw his Senator from Oregon withdraw amendment?

Mr. MORSE. Mr. President, if I may, I am going to send to the desk my amendment, as modified, that I discussed. It ought to be in the RECORD, and I ask unanimous consent that it be printed in the RECORD at this point.

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

On page 47 delete lines 15 to 21, inclusive, and insert the following:

"(i) No funds shall be made available under this Act on or after the date of enactment of this subsection (except for military sales under section 503) to any economically developed nation, except to fulfill firm commitments made prior to July 1, 1963. The President is directed to make no further commitments for assistance (except for military sales under section 509) to such economically developed nations.

"As used in this subsection the term 'economically developed nation' should include but need not be confined to any nation listed as an exception to the definition of 'economically less developed nation' contained in United Nations General Assembly Resolution 1875 (S. IV) and, in addition, the German Federal Republic and Switzerland."

Mr. MORSE. Then I want it understood that I withdraw that amendment, and substitute for it the amendment that the Senator from Idaho [Mr. CHURCH] and I now jointly offer.

Mr. CHURCH. Mr. President, I take note of the fact that the senior Senator from Texas [Mr. YARBOROUGH] is on the floor. He was one of my original supporters to amend the bill to strike the rich countries from the foreign aid list. He has now asked that he may have his name added to the substitute.

I ask unanimous consent that his name be added to the amendment, with the consent of the Senator from Oregon. Mr. MORSE. It would be a great pleasure to have the Senator's name on the amendment.

The PRESIDING OFFICER. out objection, it is so ordered.

With

The amendment offered by the Senator from Idaho [Mr. CHURCH], for himself and the Senator from Oregon [Mr. MORSE], and the Senator from Texas

[Mr. YARBOROUGH] as a substitute for the Morse amendment to the committee substitute will be read.

The LEGISLATIVE CLERK. On page 47, On page 47, after $1,000,000, it is proposed to insert:

As used in this subsection, the term "economically developed nation" shall include, but need not be confined to any nation listed as an exception to the definition of "economically less developed nation" contained in United Nations General Assembly Resolution 1875 (S. IV) and, in addition, the German Federal Republic and Switzerland.

Mr. CHURCH. For the information of the Senate, I have a list of the countries covered by the United Nations General Assembly resolution referred to in the substitute amendment. I ask unanimous consent that the list may be printed in the RECORD at this point.

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

Australia, Austria, Belgium, Byelorussian SSR, Canada, Czechoslavakia, Denmark, Finland, France, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Poland, Rumania, South Africa, Sweden, Ukrainian SSR, Union of Soviet Socialist Republics, the United Kingdom, and the United States.

Mr. CHURCH. In connection with the remarks of the senior Senator from Oregon concerning the $77 million in the bill for NATO infrastructure, on the basis of the hearings of the committee and the committee report, this is something that ought properly to be a part of the defense budget of the United States. This is not foreign aid. This is a commitment on our part to contribute a certain proportion of the funds necessary to maintain a military alliance. We are in that alliance for purposes of our own defense.

The committee report makes it perfectly clear that we anticipate the elimination of the $77 million, as a contribution to the NATO infrastructure, from foreign aid next year, and that we think it should be budgeted hereafter as a part of the national defense budget of the United States. It should come within the regular military budget, and be stricken permanently from the foreign aid program.

Because it requires time to work out such a transfer, the committee chose not to strike this particular infrastructure contribution from the foreign aid program this year. We have certain commitments, and we must meet those commitments. However, next year we expect the administration to make the change in its budgeting arrangement so that this item can be permanently stricken from the foreign aid bill.

Mr. MORSE. I wish only to add this comment: I hope this action will be recognized by the administration as clear notice to both the State Department and the Defense Department that we are opposed to further commitments for infrastructure. We believe the time has come to stop building airbases, for example, for the defense of other countries. They ought to build them themselves.

Mr. CHURCH. I agree fully with the Senator from Oregon. I believe the discussion on the floor should put the ad

ministration on notice that these budget transfers should be made next year; that Defense should take care of our NATO obligation, and that this excess baggage should no longer be carried as a part of the foreign aid program.

Mr. President, I have no further remarks to make. I am grateful to the chairman of the committee for having accepted the amendment. I hope the Senate will adopt it.

The PRESIDING OFFICER. The question is on agreeing to the amendment offered by the Senator from Idaho [Mr. CHURCH], for himself, the Senator from Oregon [Mr. MORSE], and the Senator from Texas [Mr. YARBOROUGH], in the nature of a substitute for the amendnature of a substitute for the amendment of the Senator from Oregon to the committee amendment, as amended.

The amendment to the amendment was agreed to.

adopted one amendment after another, but the amendment I am now discussing has not yet been brought up. In the House-and I say this for the information of the Senate—this year a different type of amendment was offered. Representative PELLY, of Washington, offered an amendment to strike out all of section 203-to repeal it-and this would have eliminated any form of revolving fund. On that type of proposal, he was defeated. However, no amendment has yet been brought forward which merely provides that the amounts of money as they come in shall be subject to the regular appropriation process.

On page 288 of the hearings is a list of the AID development loans for fiscal years 1962 and 1963. These are categorized, so that we can see what type of loans have been made. The first item is public activities. It shows a total of $415,800,000 for water, sewerage, power, and light; $81,800,000 for irrigation, soil conservation, and grain storage; $204,The PRESIDING OFFICER. OFFICER. The 100,000 for roads, railroads, ports, airamendment will be stated. ports, and communications; and $63,800,000 for housing and self-help. The total for these activities is $765,500,000. This is only for fiscal years 1962 and

Mr. DOMINICK. Mr. President, I send to the desk my amendment No. 292, and ask that it be stated.

The LEGISLATIVE CLERK. On page 31, line 18, after the section number it is proposed to insert "(a)".

On page 32, between lines 5 and 6, add 1963. the following:

(b) Section 203 of the Foreign Assistance Act of 1961, as amended, which relates to fiscal provisions with respect to development loans, is amended to read as follows:

"SEC. 203. All receipts from loans made under and in accordance with this title shall be available for use for the purposes of this title, subject only to the annual appropriation thereof. Receipts so appropriated and other funds made available under this title for use for the purposes of this title shall remain available until expended." Mr. DOMINICK. Mr. President, I ask for the yeas and nays.

The yeas and nays were ordered.

Mr. DOMINICK. This amendment is

extremely important, but very easy to explain. Section 203 of the bill deals with the Development Loan Fund. Sec

tion 203 itself was written in conference in 1961. It provides, as it is now constituted, that all receipts from the development loans, whether they be interest or principal repayments, shall come back into the Development Loan Fund, and may then be expended by Fund, and may then be expended by AID personnel without further authorization and without the need for any appropriation of any kind.

How much are we talking about, and exactly what am I doing? All I am saying in the amendment is that the revolving fund shall remain as it is, that the receipts from the development loans shall come back into the fund, but that there shall be congressional review, so that Congress will retain some authority over when, how, and where those funds may be expended.

It seems to me, from the debate that has taken place under the able leadership of the senior Senator from Oregon, that the feeling of the public as a whole is that Congress has not been sufficiently careful of the way in which the AID money has been spent or with respect to the amount that is being spent. That is self-evident, Mr. President. We have

It then goes on and details loans which have been made in the form of credit institutions. It contains nonproject loans, loans to private enterprise, loans to governments for natural resource development, and loans to governments for industrial development. It then covers other features, such as feasibility status, social services, and rehabilitation.

The grand total for fiscal 1962 and 1963 is $2,191,400,000 1963 is $2,191,400,000 in development loans.

Under the provision now in the bill, as repayments of these loans are madeheaven knows, we all hope the loans will be repaid, even though we are not sure they will be the total amount of $2,191 million might be subject to being spent by the AID without any control of any kind by Congress. There would be no requirement for authorization and no requirement for appropriation.

However, if if the amendment were adopted by the Senate as a whole, and were placed in the law, we would then continue the revolving fund and the development loan fund process. But we would require that all receipts, either of principal or interest, that return to that fund must be subject to the annual appropriation process, which is followed in connection with all other spending activities.

I should like to refer to pages 332 to 336 of the hearings, which show the amounts of interest now in effect on various types of loans made to various countries. In the past few weeks, there has been discussion of the interest rate of three-fourths of 1 percent and of the grace period of loans which varies from 5 years to 10 years. The proposal in the committee bill this year is that after 5 years the interest rate shall be raised to at least 2 percent. But all the loans have not been made at the rate of threefourths of 1 percent. They have varied from country to country according to the

type of loan that has been made; consequently, it is difficult to determine in advance how much the amount of interest repayments may be.

On page 332, a loan is shown as having been made to Ghana for an aluminum smelter. The loan is to run for 24 years, instead of the standard 40 years. A 4-percent loan has been made to Sudan for an industrial development bank. The terms of the loan is 15 years.

A 32-percent loan has been made to Ghana for a Volta River power project, the loan to run for 30 years.

A series of loans has been made to some other African countries-Cameroon, Ethiopia, Liberia, Niger, Nigeria, Sudan, Tanganyika, Tunisia, and Uganda. These loans are all at a rate of three-fourths percent interest, and each is for a period of 40 years. Senators can examine the tables to see what rates of interest are charged and the terms of the loans.

If we consider only the amount we have authorized for 1964-the reduced amount for development loan purposeswe see that $950 million has been authorized for fiscal 1964. If the entire amount were committed and expended this year at three-fourths percent interest the amount of interest would be more than $7 million a year. This amount would be pouring back into the Fund and would be available for expenditure without any check by Congress. After a period of 5 years, with interest at 2 percent, about $19 million would be flowing into the Treasury. If the whole $19 million were amortized over a period of 40 years, assuming repayment in full, there would be a total of $1,386 million of receipts coming into the Fund, with Congress having no authority of any kind over it.

It does not make any sense to me to have the Senate, which is supposed to be a part of the trusteeship over the taxpayers' funds say, "We are going to authorize the lending of these funds, but when they are repaid, we do not care what happens to them. Those in the executive branch can spend them in any way they please."

This is only one phase of the development loan subject. The question then can properly be asked: What has been the status of loan repayments? The answer to this question can be found on pages 712 and 713 of the hearings. This is really quite an interesting subject. Not only are we talking about the development loan funds as they have been developed over the last 2 years, but the Development Loan Fund Corporation, which was the prior agency and was then merged into the new Development Loan Fund. These tables indicate the grand totals of worldwide loans of U.S. dollars. They show the amount of taxpayer dollars that have been loaned throughout the world.

To date, the repayment of principal has been $725,677,725.52. The repayment of interest has amounted to $655,550,362.82.

If we take into consideration the interest and principal repayments, assuming the provision now in the bill had been in effect, and if it remains in the

form in which it now is, $3.3 billion would have been available for expenditure by the AID administration without any instruction by Congress concerning the places and projects where the money would be spent.

Last week there was considerable discussion about whether or not to increase the amount of the President's contingency fund. The point was made that through the contingency fund the President could spend for projects which Congress might not consider proper, or as to which he was not proceeding in the proper way to spend. As a result, the amount of the contingency fund was not increased.

But the loan funds to which I am referring are contingency funds which far exceed anything the President is given by Congress.

If section 203 is retained as it is, we build into the bill, a contingency fund of $950 million for a period of 40 years. This does not include interest repayments which would be coming in.

In addition, we are providing a contingency fund by allowing unrepaid expenses on loans already existing, which amount to more than $5,728 million. This money would be coming back to the fund without Congress having the ability, as the bill is now written, to determine how much of that should be spent, and where, and in what manner it should be spent.

I need not take much longer to discuss this subject. The details seem to be quite plain. However, there are a couple of items I should like to refer to.

In 1961, the General Accounting Office, commenting on back-door spending through revolving funds, said:

As with authorizations to borrow from the Treasury we believe that revolving fund financing likewise represents a lessening of congressional control which is justified only on a clear showing of need and benefit to the Government. We believe that the need

to appropriate funds supplies the best incentives and the most effective techniques for congressional control of agency activities. Consequently, if the revolving fund feature is to be retained in the bill, we suggest that the bill be revised to provide that funds may be used for the loan program only in amounts stipulated in annual appropriation acts. The related administration expenses would likewise be subject to an annual review by the Congress.

What I am proposing is exactly what was recommended by Comptroller General Campbell, in the statement I have just quoted.

Mr. FULBRIGHT. will the Senator yield?

Mr. President,

Mr. DOMINICK. I yield. Mr. FULBRIGHT. This question has been before Congress on three different occasions-in 1957, 1959, and 1960.

The amounts involved are, at the moment, relatively small-between $3 and $4 million, although the Senator has said that it is anticipated that in the future the amounts will be larger. It was hoped that this fund would be given some flexibility, in terms of repayments in the future. However, if the Senator will request that the order for the yeas and nays be rescinded, I shall be glad to accept the amendment

and take it to conference. It has been under consideration three times before; it does not involve a new issue. Heretofore the Senate has rejected such an amendment.

Mr. MORSE. Mr. President, will the Senator from Colorado yield?

Mr. DOMINICK. I yield.

Mr. MORSE. I join in the request. The amendment is a very sound one. As the Senator knows, I support the amendment, and I believe it should be taken to conference.

In view of the offer of the chairman of the committee to take the amendment to conference, I suggest that the Senator from Colorado agree to the suggestion that he request that the order for the yeas and nays be rescinded.

Mr. DOMINICK. Then there would be a voice vote on the question of agreeing to the amendment?

Mr. MORSE. Yes.

Mr. DOMINICK. Mr. President, I ask unanimous consent that the order for the yeas and nays be rescinded.

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

Mr. DOMINICK. Mr. President, I thank the distinguished chairman of the committee for his courtesy in connection with this amendment. The amendment is really extremely important.

I should like to ask the chairman of the committee a question. I have a similar amendment in connection with the Alliance for Progress revolving fund.

Mr. FULBRIGHT. It is an identical amendment, as I understand, except that it would apply to the Alliance for Progress. Is that correct?

Mr. DOMINICK. Yes.

Mr. FULBRIGHT. I am perfectly willing to accept it, too.

The PRESIDING OFFICER. The question now is on agreeing to amendment No. 292, offered by the Senator from Colorado to the committee amendment in the nature of a substitute, as amended.

The amendment (No. 292) to the committee amendment, as amended, was agreed to. The PRESIDING OFFICER. The committee amendment in the nature of a substitute, as amended, is open to further amendment.

AMENDMENT NO. 314

Mr. DOMINICK. Mr. President, to the committee amendment, as amended, I offer my amendment No. 314.

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

The LEGISLATIVE CLERK. In the committee amendment, as amended, on page 38, in line 17, after the word "provisions", it is proposed to add the following:

(1) All receipts in United States dollars or from loans made under this title and from loans made for the benefit of countries and areas of Latin America under title I of chapter 2 of part I of this Act, notwithstanding loans payable as to principal and interest in section 203, shall be available for use for

United States dollars in furtherance of the purposes of this title, subject only to the annual appropriation thereof.

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