stream of dollars poured in from abroad. This line of thought is as uninformed and childish as the other extreme, which many Latin Americans also uphold: that is, that foreign aid or foreign investment should be rejected because in themselves they are harmful. Both extremes, the ingeniousness of those who expect everything from abroad and the prejudice against foreign capital, are equally wrong and injurious. The realistic and constructive course is to admit that investments obtained from foreign sources are necessary to accelerate the process of capital formation, but in the full knowledge that everything cannot depend on such external assistance but basically must depend on domestic effort appropriately encouraged by wise fiscal and monetary policies.

INTEGRATION, CAPITALIZATION, AND PLANNING Having thus described the factors affecting capital formation, let us project these concepts from the national level, where they are now developing, to the regional level, through the process of integration. I will tell you right now that I am among those who are convinced that integration is bound to expand the opportunities for profitable investment, both internal and external.

To demonstrate this, it will suffice to outline the mechanics of economic growth that would operate. There cannot be the least doubt that, as we expand markets, our industries will have broader opportunities for growth. They will be able to sell more and to improve their earnings, as well as those of their shareholders and their workers; consequently, tax revenues will increase without its being necessary to encumber the capacity for savings, investment, and capitalization. On the contrary, the capacity for both

public and private investment will expand.

It is no mere coincidence that the smaller a country, economically speaking, and the smaller its volume of trade, the smaller will be its capacity for investment or capital formation. Thus, the small countries that have wanted to advance economically have had to export, because with limited production intended solely for domestic consumption they would not have been in a position to produce capital goods; they would not have had sufficient capacity to finance the cost of the investment required for their development. Switzerland, Sweden, and New Zealand may be cited as typical cases.

Fortunately this lesson now appears to have spread to Latin America. Among representative sectors in our countries there is currently an awareness of the close relationship between this complex process of capital formation and the expansion of production which can be attained through reciprocal exports within a common market.

In this respect, allow me to make a brief aside. One thing that has impresed me most keenly in this visit to Chile is the new mentality that can be observed among our industrialists and businessmen, intent on projecting Chile outward. I recall that only 10 years ago one could not have said the same. At that time, as Minister of Finance in the previous Government, it devolved upon me to sign two decrees, both with the force of law, for the development of fisheries and the iron industry, waiving taxes for both, allowing them to secure foreign exchange at the most favorable rates, and giving them other incentives which at that time it was possible to grant. Certainly there was no absence of warning voices, predicting the failure of the measures advocated by "that young Minister, full of theories, who wants to apply techniques that will yield no results and whose decrees will not even be put into force."

Today, when I read the statistics, when I fly over the national territory, and when I learn that the fishery industry has become

a flourishing reality through the exportation of fishmeal and other items; and when I also see that iron exports are compensating the decline in nitrate exports, I am deeply gratified to see that in this country also, when incentives for work are created, new forces emerge as if they were springing from the desert or from the rocks. Because the Chilean has extraordinary creative capacity and perception; so much so that many times the lightly stimulating touch of a legislative measure is enough to release that dynamic impulse that has only been awaiting propitious conditions to manifest itself.

I have experienced equal satisfactioneven greater, in fact, because the InterAmerican Bank is connected with the process-in observing the unusual development of the paper and pulp industry, which in its time also had to overcome the skepticism of the Jeremiahs who rushed forward to predict that we would never be able to compete with the Canadian or Finnish producNonetheless, it fills one with pride today to go to the presses of the great newspapers of Buenos Aires, Mexico, or Lima and find there on the great rolls of newsprint the words, "Made in Chile."

ers.

Chile has learned the lesson to which we were referring a few moments ago, and that is why it is now one of the Latin American countries that best understands the advantages of and the need for a common market.

And now, my friends, let us go on with the analysis of the problems of financing integration. We have already spoken of the role of external contributions in the process of capitalization. We now may say that external financing can also have a decisive function in the process of integration, as the European experience has eloquently demon

strated.

In the course of my activities in the Inter

American Bank I have devoted a good part of my time and I believe that it has been time usefully spent-in traveling through the United States attempting to present a true and realistic image of Latin America, an image that will dissipate many misunderstandings. I have found in both the businessman and the man on th street in the United States a very deep interest in reaching terms of understanding with Latin America. What happens is that they do not know how to build up that understanding.

It is very interesting to observe how in

cities or in communities where the concept of Latin America is very general and even confused, there is, nevertheless, a genuine interest among businessmen in the possibility of expanding our markets.

This should not be surprising becausedespite what many narrowminded people maintained following the end of the last war-the industrialist and the investor of the

United States also benefited from European recovery, because the industrial growth of Europe has been promoted jointly by foreign investments, basically from the United States, and by its own investments.

I believe that in our hemisphere we can repeat such an experience. Of course I think that in Latin America private investment must be supplemented by international public investment because there are fields and circumstances that require a special kind of financing, over a long period of time and under very flexible conditions, that cannot be asked of private financing.

It is also essential that our countries have development programs very clearly setting forth the objectives sought and the sectors that predominantly require external investment. Investment just for the sake of investment, or borrowing just for the sake of borrowing, not only will not insure development; it can often pile up fatal results. Not exactly for foreign investors, but for ourselves. Available foreign resources are always limited; therefore, if we do not use them well, if we do not encourage and chan

nel them wisely through sensible programs and plans, we shall be impairing our borrowing capacity and squandering the external investment.

It is gratifying to note Chile's judiciousness in preparing the 10-year plan now in force. It is equally gratifying to observe how in Latin America, especially since the Charter of Punta del Este, most of the countries are following the same course.

Suffice it to say that in a little more than 2 years, 10 countries have set up their national planning agencies and 6 of them have embarked on the execution of new national development programs, while a number of other countries are engaged in establishing their planning agencies and preparing their plans.

Nevertheless, I cannot conceal a certain concern stemming from a knowledge of our Latin tendency to give theoretical and formal replies to problems, forgetting that the statement of the problem and its solution is not enough; the essential thing is that the plans be fulfilled, carried out, implemented. I remember my former professor of constitutional law, Gabriel Amunátegui, when he used to say that the institutional strength of Chile in the 19th century was largely the product of the good sense of the Chilean people, who did not believe that simply because a constitution had been adopted and put into force, all the problems of the country's institutional and political organization were going to be miraculously solved. As all of you very well know, the determining factors in Chilean institutional stability were the creative ability and perseverance of Portales, the good sense of the subsequent governments, the influence of our intellectuals, the increasing maturity of the people. Thus the foundations of our democracy were laid. Had those factors not existed, it would have been impossible, even with the best constitution in the world, to have built up the institutional life of which we are today so justifiably proud.

There were countries that in the last century adopted splendid constitutions, which in a short while they replaced with others theoretically even more elegant, as if the mere change from one to the other would be sufficient to organize the civic life of the

nation or to give consistency to its institutions. Similarly there are countries that today prepare elaborate programs which they

publish in attractive booklets, filled with

graphs and charts-often the product of the zealous and exhaustive work of competent and well-meaning technicians—and they believe that in this way they have provided the answers to the problem of their development. They forget that a plan, however perfect it may be, cannot produce the results expected of it or achieve the goals proposed in it, if the creative ability of the people, the mystique of work, the sense of common cause within the community, are not applied to the attainment of those goals and those results.

TOWARD A COMMON FINANCIAL MARKET

Up to this point, we have been analyzing what we might call the constants of Latin American financing, or in other words, general financial aspects which, while they certainly have different overtones in the various countries, still have basic common denominators. Now I shall refer-and I shall do it briefly, because I know that the technical problems of financing are less attractive than the general theses on integration— to the basic machinery that is needed for the financing of integrated regional development. To summarize, I might mention the four following points:

First, expansion of the Inter-American Bank's function as an integration bank.

Second, the establishment of a system for coordinating our monetary policies, which as I have ambitiously ventured to propose

and not because I am an old central banker at heart-might be projected in the future toward the establishment of a hemispheric central banking system.

Third, the adoption and maintenance of common policies and practices that will make it possible to draw upon the great international currents of private investment.

Fourth and last, the projection of national development plans to the regional level.

Let us examine, at least from the more general standpoint, the operation and the role of the mechanism just enumerated.

THE INTER-AMERICAN DEVELOPMENT BANK AS AN INTEGRATION BANK

As far as the Inter-American Bank is concerned, we must remember that when it was established a little more than 3 years ago, the idea of integration was not yet regarded as the urgent and undelayable undertaking that it is judged to be today by the more discerning groups in Latin America. Thus, the Bank, while it was not, strictly speaking, created as an institution to meet the financial problems of integration, problems which at that time were barely glimmering on the horizon, has had to begin adapting its policy to these new demands.

Fortunately, the agreement establishing the Inter-American Development Bank allows this adaptability, because article I clearly assigns to the Bank the task of accelerating the development of the member countries, individually and collectively. On the basis of this provision, which puts upon the Bank the responsibility of contributing to the economic and social development of the countries, not just individually, but collectively, we are transforming the institution into an integration bank, without for a moment ceasing to be the development bank which the founders wished to estab

lish, for, as I have said before, we believe that full development cannot come about in Latin America without the economic integration of the region.

At the risk of seeming immodest, I can truly say that the Inter-American Bank has already accomplished a great deal in this endeavor of encouraging the integration process. I might mention, for example, the direct stimulus we have provided in Central America through our assistance to the Central American Bank for Economic Integration, which was set up to promote the development of regional or economically complementary industries and projects. We likewise helped in the direct financing of certain multinational projects in other regions of Latin America. I have just come from the Republic of Uruguay where, with the assistance of one of our loans, work has been started on Route 26, which crosses Uruguay from one extreme to the other, from the border with Brazil to the border with Argentina, and which connects at the two borders with national highways of the two neighboring countries, thus constituting an international route that will facilitate trade and communication among the three countries, and which will make possible, first, economic complementation, and subsequently, economic integration.

And right here in Chile, only 4 days ago, I was present at a meeting in Valparaíso, where a proposal of the same sort was brought up. It concerns the construction of a modern highway to join the port of Valparaíso with the Argentine city of Mendoza. A mere glance at the map brings out the economic importance that such a route has for Valparaíso, and the benefits that such a highway could bring to the Cuyo region and the transAndean region. Naturally, these appraisals of the proposal will have to be confirmed by the technical experts, and in addition to the advantages that the respective provinces of the two countries might obtain, consideration will have to be given to the importance

of a route of that type as a means of facilitating trade within the free trade zone as it is now established, or within the common market which we should like to see established soon.

In addition to this kind of direct financ

ing for projects connected with integration, our Bank also helps indirectly through its operating policies or the effects of its loans. I shall try to explain this by giving some examples.

When an application comes into the Bank from one of the member countries to establish, let us say, an iron and steel plant, the first thing our staff does is to make a study to ascertain not only whether the industry to be established established signifies development within the country, but also whether, because similar plants exist in a neighboring country that would be capable also of supplying the applicant country, it might be more desirable for the latter to use the resources that the Bank might provide for some other industry of perhaps greater priority. Naturally, no such judgment can be imposed upon the countries, but our experience in this respect has been highly favorable. Generally, we have found great understanding of the fact that economic development is not really favored when similar industries are established in countries whose markets are small or where less favorable conditions prevail for the development of certain industries than those in other neighboring countries. Such investments would very soon have to be protected artificially, with protective tariffs or other similar measures. On the other hand, those same countries may very well offer ideal conditions for the establishment of other types of industry, toward which the investments should be encouraged.

With respect to the effects of our loans which indirectly play a catalytic role in integration, I can mention a very representative

case.

Some months ago, during a trip through Central America, I visited a housing project that was being built with funds provided by our Bank. It was a project of great importance to the city of San Salvador, because it involved the construction of more than a thousand homes, which, not to mention the social benefits to the future inhabitants of those homes, was making a great economic impact on all sectors concerned in the construction industry. It was being carried out by a group of very competent engineers, one of whom made a comment to me, the great significance of which I need not emphasize to you. "Just consider," he said, "if this project had been undertaken 5 or 6 years ago, we should certainly have had to import all of the basic materials from the United States. But today we are getting from other Central American countries whatever is not produced in El Salvador. For instance, we produce the cement ourselves but the sanitary equipment is made in Costa Rica and all the lumber comes from Honduras." This example graphically illustrates how our resources, lent to a specific country, are indirectly benefiting industries in other Latin Amerian countries, thus opening the Latin Amerian countries, thus opening the way for integration.

Beginning this year we shall be contributing from another angle to these efforts. At the meeting of our board of governors held last April in Caracas, we were instructed to begin a system of financing, somewhat on the experimental side, of intraregional exports of capital goods. We shall set up a fund, drawing at first on part of our own ordinary resources, to assist the Latin American countries that produce capital goods in the marketing of those goods in other countries of the area. They are unable to do this at present because they lack the financial assistance that producers of the same goods in other regions enjoy, which makes it possible for the latter to offer their products to Latin American importers on

better terms, not of product quality or price, but in regard to periods of repayment and interest on the loans.

Of course, the Bank would have preferred to create a new fund specifically designed for this new financing activity which it is now going to undertake. But appreciating the difficulties and limitations that would have been encountered in trying to get the necessary resources, I believe that in any event the step taken offers great possibilities. However, it must be emphasized that in using this mechanism for the promotion of exports of capital goods, the Bank will never lose sight of the fact that it is an investment bank, a development bank, and not a foreign-trade bank. Therefore, our action in this field will be in the nature of a supplement to the effort made in the first instance with national resources, and we shall never forget that this is not a question of financing transactions just because the transactions are there to be financed, but rather of assisting in the exportation of capital goods in those cases where the Latin American country that is to receive the exports has a genuine need for the goods concerned. The same applies to cases where the exporting country may be enabled to strengthen its economic structure and develop sound industries if it has the incentive of this system of export financing.

If we were to proceed otherwise, we should fall into the paradoxical situation of sponsoring exactly what we have so often criticized in certain suppliers' credits, who often require our countries to accept imports that are not the most desirable, but which they must accept or else do without the credit.

Finally, with reference to the impact of the Inter-American Bank's action on the process of integration, we shall mention only the technical assistance and promotion work we are doing in this field. In close harmony with the Latin American Free Trade Association and other agencies operating within the inter-American system, we are attempting to coordinate efforts to make the best possible use of the technical resources of each agency in order to attain the common objective.

COORDINATION OF MONETARY POLICIES

Let us now consider the second mechanism we believe to be necessary in order to advance toward a common financial market. This concerns the coordination of the monetary policies in the region.

that demonstrate the need for such coordiAt this very time events are taking place nation. Someone said to me last week in

Uruguay, in connection with the criticism that had been voiced about that country for having adopted restrictions on imports, including those from countries of the Latin American Free Trade Association (the restrictions being the consequence of the unfavorable financial situation from which the country has been suffering): "We are being censured because of this reduction in imports, but there are other countries in the Latin American Free Trade Association which, although they have not adopted quantitative restrictions, have on the other hand altered the value of their currency. In that way, by indirect means, they are really obstructing our exports."

Here in Chile this remark was made to me: "If there is to be a genuine regional market, the reduction of customs tariffs is not enough; we need a common currency." This conclusion, expressed by businessmen who have reached it on the basis of their experience in foreign trade, is indisputable. To be able to trade, we must have a constant unit of currency because if, in the course of transactions, we are going to alter the value of that unit, sometimes for competitive reasons and, to put it frankly, without warning, in order to gain an advantage over another country, we will find it impossible to create a climate of mutual respect and confidence,

so necessary for the full development of trade within our region.

I believe, however, that there is no need for a common currency in the literal sense, in which all the coins would be the same and all the paper bills identical. What we need is what has been done in Europe: a monetary agreement under which the Common Market countries reciprocally respect the comparative terms of value that they have given to their currency. Thus, for example, when a few years ago the Federal Republic of Germany wanted to revalue its currency, as an expression of its prosperity, it did so in consultation with the other associated countries. And we might even say that not only did Germany do this in consultation, but that pressure was put on her by the Common Market members, in order not to accentuate the maladjustments that were already apparent between the situation of Germany and that of the rest.

We need a scheme of this type in Latin America. What form of institution should be adopted? It could be any one that would ensure the coordination of the various monetary policies, but in my judgment we should move toward the most ambitious plan; that is to say, the creation of a regional central bank, similar to that which Monet has proposed for Europe and which I believe is bound to come into being in the future, once the difficulties that at present stand in its way have been overcome.

Under such a plan not only would the coordination of monetary policies be sought, but at the same time international reserves would be built up. We must not forget that despite all its foreign trade difficulties, Latin America at this moment has available $2.5 billion in reserves, and furthermore, these reserves are showing a tendency to increase. Nevertheless, as a rule every country in Latin America really has to run the gauntlet and submit to all kinds of conditions imposed from outside when, in order to handle momentary imbalances, it has to resort to stabilization loans of $10 or $15 million.

If Latin America were to make a single

fund of its reserves, which would mean a volume as important as the reserve of the sterling area, our region would have an extraordinary negotiating power. We should perfectly well be able, too, to manage intraregional imbalances among ourselves. And if at some time we should have difficulties and require additional resources for our common reserve fund, we would be able to negotiate lines of credit, or expand them, bringing the weight of the great mass of our operations to bear.

Therefore, I say firmly that it is not only because of outside attitudes unfavorable to our region that we have not found an adequate answer to our problems in this respect. I venture to say, rather, that the responsibility of finding that answer is essentially ours. Let us unite, let us integrate, and then in these and all other problems that afflict us today we shall be in a much better position to stand up for our interests, just as other regions of the world do.

COORDINATED ATTRACTION OF PRIVATE
INVESTMENT

We have already pointed out the importance to be attached to private investment in the process of integration. It is imperative that Latin America standardize its policies for attracting such investments when they are required from abroad. To demonstrate the desirability of such coordination, it will be sufficient to describe what our present situation is.

What is happening today? Through the process of fragmentation that we have suffered historically during the last 150 years, we have accustomed ourselves to compete among ourselves. And we have projected that competition outward, often trying to present a better image of our own country,

to the detriment of the image of some other country or countries of our own region.

The same thing is happening with respect to foreign private investment. So far we have witnessed in Latin America, a process of competition, in which each country attempts to offer better conditions to international capital, each struggling to solve its investment needs on its own account.

If, on the contrary, we were to decide to create a single set of rules for the foreign investor in this region; modern rules in which the incentives for encouraging the flow of capital would be reconciled with a system of mutual guarantees, by which the investor who placed his capital in any of our countries would have a hemispheric guarantee for his investment; if we were to achieve such coordination, we should certainly have made an unprecedented advance in our efforts to attract the external resources we so greatly need. And above all, by this multilateral approach, we should eliminate the friction that is inevitable in all financial relations of the bilateral type, wherein one country needs the resources and the other provides them.

FROM NATIONAL TO REGIONAL PLANS

I shall conclude this part of my paper by referring to the necessity of coordinating our various national development plans at the regional level. Today this no longer seems like heresy-which shows once again that despite all obstacles, we are advancing. Up to a few years ago, to speak of planning, even at the national level, was to lay oneself open to all manner of criticism. Today we hear and read frequent appeals for planning, or for the coordination of plans on a hemispheric scale.

However, I believe that in this process we must be very realistic and not pretend that theory will take us farther than the actual situation advises us to move. In this respect I should like to recall what has happened in Chile. Here in this auditorium there are two distinguished professors, col

leagues of mine in the economics department, with whom I had the opportunity of teaching for many years. They will remember that one of our reasons for criticizing Chile's Corporación de Fomento, was that we felt it had failed to comply with the mandate of formulating a "general plan" for the development of production. Like the inexperienced persons we then were, we reproached the CORFO for not having complied with what we thought should have been its first obligation. As I look back now I can say that fortunately this agency did not try from the very start to prepare a national plan for the development of production, which in the best of cases might have been very well presented but which might have been only a masquerade of a plan. In 1939 or 1940, Chile it have the other prerequisites for developwas in no way equipped technically nor did ment that were necessary to enable it to work out the plan which is now in force, 20 years later.

I believe that the wise and sensible course was the one that was followed, with that pragmatic judgment with which so many decisive problems in this country have been faced, almost always with competence. Development by sectors was started, with priorities for the basic ones.

A beginning was made with electric power and steel, and then, as experience was acquired, a realistic picture of the development plan, of possible goals that could be attained, of the actual amount of investment required, began to take shape. In short, CORFO kept its feet on the ground, reconciling aspirations with actual possibilities.

with those of others. But that can be achieved only step by step, with practical measures. We are already working in that direction at the Inter-American Bank.

A few months ago we inaugurated a program of technical assistance for industries that wished to plan their requirements and their perspectives at the hemispheric level. And to our great satisfaction, within a few weeks we received a request from the Latin American Iron and Steel Institute to provide it with funds that would enable it to make studies concerning the establishment of a sort of Latin American Iron and Steel Community.

I do not want to magnify the importance of this latter aspect, but I ask you to note that European integration was built up on a similar basis. Let us remember that the Treaty of Rome, concluded in 1956, stemmed basically from the plan of Monet and Schumann which some 6 or 7 years earlier had created-for reasons of European political balance and in large part through fear of a new rise of German militarism-that great economic community unifying the coal and steel industry, which is plainly the basic industry of Europe.

have an iron and steel industry of comparable Naturally, we know Latin America does not importance, but it is obvious that we must inevitably move toward its development, because as you well know, economic progress essentially involves sources of power and the use of steel. That is why all countries-including ours, of course-tend to have their own iron and steel industry, unfortunately in many cases in an artificial form. As I have noted directly in my travels, there are iron and steel plants in Latin America that are not functioning, either because production costs have turned out to be too high, or because the industry was not properly planned. Therefore, it is highly necessary to encourage or sponsor the idea of coordinating the various national development plans at a regional level and, if possible, to attain a sound expansion of the iron and steel production of

the region as a whole, making optimum use of the heavy investments that such development requires.

This is not the only example. In the matter of sea and air transport we have what is perhaps an even clearer proof of the necessity of combining our efforts. All of us can note as we travel around our hemisphere how every country wants to extend its own airlines or its own merchant marine beyond its own borders. This is the reflection of a nationalism, easy enough to explain, that has been part of our recent historic development. Unfortunately, the individual effort of each country is insufficient to build up those air or maritime enterprises enough to make them count to any appreciable extent in the broad international field of transportation.

Other nations, showing more practical sense, have followed a different course and have prospered in this field; the Scandinavian countries, for example. Up to a few years ago, Norway, Sweden, and Denmark each had its own airlines, until the time came when they suddenly noticed what was obvious: that by integrating into one large regional company they would have much greater prospects of competing with the powerful international companies. Today SAS, the company established in common by the Scandinavian countries, occupies a distinguished place in the field of world air transport, with much greater profits for Sweden, Norway, and Denmark than they would ever have been able to obtain had they continued, each with its own resources, to support their isolated national airlines. It seems to me that this is a field that the countries of Latin America ought also to explore. However, we must not be satisfied with only a study, as has happened before; decisions must be taken that will make it possible for a great Latin American airline

to occupy the central counters of the airports, instead of the secondary places where the offices of the various airlines of our countries are at present scattered.

Latin America sends hundreds of millions of dollars out of the hemisphere to pay for the services of foreign merchant ships. I am convinced that the day the countries of Latin America decide firmly to negotiate among themselves the possibility of common action in this field, as occurred, in part, with the negotiations that led to the Gran Colombiana fleet-we shall be helping to strengthen our region in a sector of the greatest importance to us.

Other examples could be mentioned, but I believe that those offered are enough to give a clear idea of the situation. In order to arrive at the regional planning stage in Latin America, we can begin by coordinating sectors in certain industries and activities where such coordination is immediately feasible. Thus we shall begin to advance, and at the same time we shall be laying a solid foundation for the Latin American integration of the future.

TOWARD POLITICAL INTEGRATION

Judging by the close attention with which you have been following these ideas, I get the impression that you are in agreement with them and that they seem logical and sensible to you. But I am sure that these questions have come into your minds: How are we going to accomplish this? What steps must we take? How can we set in motion all those things that the new study groups and the new technical reports recommend?

All of us, the technicians as well, are asking ourselves the same questions. In reply I venture the idea that, along with our work in the direction of economic integration, we must begin to think of the necessity of advancing toward political integration.

This may seem risky or ambitious. But if we look at things realistically, it is evident that we are not going to be able to coordinate monetary policies, or adopt common standards to attract investment, or establish regional merchant fleets, if we do not bring ourselves into accord politically. That is why, with all due respect for the technicians, I believe the time has come for action at the political level; that is, by those who have the supreme responsibility of legally representing our people and their hopes for real progress.

I have also taken the liberty of voicing the idea of Latin American assembly or parliament, in which the agreements signed by our countries at regional conferences could be ratified multilaterally. Because, my friends, Latin America is plagued with unratified agreements, agreements negotiated by the technical experts, who take them back to their countries to obtain legislative ratification that does not always come.

Of course, the Latin American parliament that I am imagining must reflect a genuine expression of public opinion; that is to say, it must be representative not only of the political sectors that govern the countries but also of the diverse dynamic forces that exist within each national community. Such a deliberative body might even serve as a model whose mere presence and example could influence those countries of our hemisphere where true democracy does not yet prevail. It would be a clear practical demonstration of what a truly representative system should be, for within it the various doctrinal trends-call them right, center, left, or however you want to distinguish them-would alternate. Such is the case in the European parliament of Strasbourg, which so greatly has influenced the political course by which the Old Continent is opening its way toward the future and which, furthermore, makes it possible

to bring into the open the predominant trends of each country, thus preventing the breeding of antagonisms because of the lack of discussion or knowledge of the various ideas and possible discrepancies.

That parliament is perhaps one of the major factors in the achievement of the present political solidarity among the countries of the European Community.

I know that many people will say that this type of political integration is possible in Europe because of its greater cultural, economic, and technical development and its experience more recently acquired in two frightful wars. But we can reply that if European integration has been accomplished in spite of the 30 million victims sacrificed on the battlefields and in spite of the ancestral hatreds that long divided the now integrated nations, we have no reason to magnify our own differences. On the contrary, among our countries there are historic bonds of solidarity more powerful than any motives for disagreement. But let us not consider Europe alone; let us pause a moment and see what is happening in other regions which certainly have not reached the degree of development found there. We might mention India, for example. When the subcontinent became independent, it luckily had the political talent of a Gandhi and a Nehru, who accomplished the miracle of holding together a community of 400 million people, conciliating the local interests of the various groups that comprise it, whose diversity can be succinctly indicated by the mere fact that they speak 80 or 90 different languages and dialects.

What would India's fate have been if the small provincial interests had prevailed? It can easily be imagined. To emerge from its underdevelopment India must overcome many staggering problems, all of them infinitely more complex and more difficult to solve than those that preoccupy us in Latin America. Beyond a doubt there are more ethnic, religious, social, economic, language, and other such differences among the states of India than among the countries of Latin America. The task of development for India is of course extremely difficult. But obviously it would have been far worse if, instead of being integrated, the country had been broken up into dozens of independent states.

Let us look also at Indonesia, that new

state, spread out over 3,000 islands, with many tongues and races, lacking the preliminary requirements for development, and with only a few technicians when it came to independent life. However, Indonesia did have the necessary political leadership, and it was able to establish a community of 100 million people which today, despite the immediate serious financial and economic problems, is undeniably taking its place in the world scene.

Then there is the Arab world which-whether or not we like the method by which it chooses to work for reunification-is a reality that is making itself felt more and more on the world map. For despite the difficulties that we read about in the newspapers every day, the Arab nation-or rather, the group of nations that form it-is advancing toward integration, and plainly the Middle East is coming to the fore as a new focal center of growing importance in the scheme of forces now existing in the world.

And now, Africa. Right before our eyes, day by day, we can see the emergence and consolidation of pan-Africanism. We all know that there is no single Africa but rather hundreds of peoples, who do not even have the apparent racial unity that people commonly think they have, but on the contrary represent the coexistence of widely diversified forms of political, economic, and social organization.

A few days ago representatives of all the autonomous countries of the African Con

tinent met in Addis Ababa, capital of Ethiopia. The majority of those states have just come into being, and therefore they might have clung to a strictly introverted kind of nationalism. But instead, the new African states have embarked vigorously on a plan for integration. for integration. They are setting up regional organizations of a political type, much more advanced than ours. The thing is that despite the underdevelopment with which almost all of them are afflicted, they have leaders who are availing themselves of the experience of others in order to move forward rapidly and avoid errors.

We have evidence of this process at the Inter-American Bank. A year ago a mission of several African bankers came to our headquarters in Washington and asked us to permit them to observe how our institution operated, because the African countries wished to establish a regional bank similar to ours. Naturally we were pleased to open our doors to them and to offer them the benefits of our experience, as part of our mission of projecting the Latin American image into other latitudes. Later we sent officials to Africa who renewed this stimulating contact. Today the bases for the Pan African Bank have been established, and so likewise the bases of the African common market, the political organs of consultation, and finally, a series of economic and technical mechanisms that will all work toward integration. In other words, in these few years Africa has not only profited by the experiences of our own bloc but is taking much more far-reaching steps. And all of this has come about, I repeat, despite their differences of structure, tradition, mentality, culture, language, beliefs, and race; differences which, by contrast, make our countries seem more than ever a single nation.

THE PLURALISM OF THE WORLD TODAY These processes of integration or reunification of great regional blocs should not be surprising to anyone who follows the course of world events. It is evident that the world is moving toward what we might call pluralism of the international type.

It cannot be said today that the world gravitates only between two points, Washington and Moscow. In the socialist world, Peiping now makes its own weight felt; and Belgrade offers another alternative, with obvious influence in its sphere.

Old Europe is steadily recovering its historical stature. In the Middle East, Cairo is beginning to show an entirely new look. We have already witnessed how Africa in Addis Ababa today, in some other capital tomorrow-is also standing up on its own two feet. I ask myself, my friends, where is Latin America? What picture do we present of ourselves as a hemisphere with a voice, with a destiny, with a call to progress?

In the field of the Western democracies,

Therefore, I emphasize the urgency of Latin American political integration. And I believe, Mr. President and my esteemed friends, that Chile has a very important part to play in this task. Let us remember that despite the poverty in which it began its independent life, Chile made bold to project its message in the direction of other Latin American countries. True, the projection was not so clearly drawn as the 19th century advanced. But in the 20th century, happily and it is sufficient to look at this country's foreign policy in recent years, under various administrations-Chile has again found its great Americanist projection, that feeling for integration that was quiescent in the thinking of Bello, Montt, and other great statesmen, who always held in their minds and hearts the idea of and attachment to association with the other American countries.

Chile must continue to advance along this path, as it has been doing at inter-American meetings in recent years, where it has consistently introduced or supported proposals

of Americanist scope. I believe that not only are those thoughts present in the minds of our political leaders, in the concern of our technicians and our businessmen, but that they also form part of the very sentiments of the Chilean people. They are present also in the universal voice of our poets, and of these there is no better voice than that of the great woman whose love for her land and its people reached out to all the confines of this America of ours. This America, which Gabriela Mistral loved with the same tender

affection she bestowed upon her own beautiful and cherished land, of which she wrote, while in Europe, in 1930:

"Born under the sign of poverty, with few resources and a meager population, the nation understood that it had to be frugal, hard working in full measure, and peaceful in its civil life. If one were to give descriptive names to our countries, one might say: Brazil, or horn of plenty; Argentina, or universal fellowship; Chile, or the will to be. This stubborn will to exist has sometimes had an aspect of violence, and to some it appears out of proportion for 5 million people. But I, having no shred of Nietzscheanism, I like to think of it, to keep watch over it, and to stir up its guarded embers, because the southern continent may one day have need of that will, and it might both serve and save at some critical moment of continental solidarity. Countries that radiate little energy or feeling for mankind, countries that are not dynamic, are small, no matter how large they may be; small, very small countries that breathe outward in great spheres of influence grow steadily larger and may even reach the infinite. Their depths cannot be sounded, no one knows how far they reach, because their potentials are the same as the potentials of the individual soul; that is, they are immeasurable."

Thank you very much.

ENERGETIC EFFORTS TO STIMULATE COAL EXPORTS REQUIRE ASSISTANCE OF TRANSPORT AND TOLL COST CUTS

Mr. RANDOLPH. Mr. President, the productivity and the prosperity of the coal industry is so important to the economy of West Virginia and several other States-especially in the Appalachian region-that we are stimulated to express gratification for the efforts of Government and the industry to increase coal's markets abroad. But these efforts need the assistance of transportation cost cuts and reductions in Panama Canal tolls.

In West Virginia, although Statewide unemployment has dropped from a level of about 12.5 percent in 1961 to 7.5 percent at this time, the jobless rates in the coal producing counties, especially in the southern part of the State, remain inordinately high.

In spite of more outmigration from the labor force in some West Virginia communities than from most others of the State, here are a sampling of the prevailing unemployment figures for the predominantly coal economy counties: Fayette, approximately 16.1 percent; McDowell, near 15 percent; Logan and Boone, close to 14.7 percent; Raleigh, about 10.7 percent; and Mercer, slightly over 10 percent.

It is apparent, therefore, that increased coal production and carloadings of the high-grade metallurgical and steam coals of the area are needed to

stimulate reduction of the unemployment rate.

Gov. W. W. Barron, of West Virginia, during earlier trade mission visits to Japan and later this year to Europe, emphasized the quality, the availability, and the stability of the mine-mouth price of the State's bituminous coal.

Under the energetic leadership of Hon. John M. Kelly, Assistant Secretary of the Interior for Mineral Resources, various ways in which the Nation's coal industry could increase its sales to foreign markets have been studied. They were discussed by spokesmen for industry and Government at a mid-September Washington conference sponsored by the Department of the Interior.

Assistant Secretary Kelly has pointed out that, during the past decade, energy out that, during the past decade, energy consumption in America's principal foreign coal markets-Western Europe, eign coal markets-Western Europe, Canada, and Japan-increased 25, 45, and 115 percent, respectively. He said that recent information on trends abroad indicates that "a tremendous additional market is emerging-enough to absorb U.S. exports of up to 125 million tons of coal by 1970."

But he emphasized:

The great potentials for our metallurgical and steam coals will not be realized automatically; a substantial share of the growing energy market will be captured only if we are willing to work for it.

The Department of the Interior is convinced that with abundant reserves of coal available to meet virtually any requirements, and a demonstrated ability to keep costs remarkably stable, the domestic coal industry has opportunities for significant increases in coal sales throughout the world. The industry's strengths are reinforced by already apparent means for increasing efficiencies in coal mining and preparation, by railroad and port facilities that could easily handle much larger exports, and by new and more economical transportation concepts now emerging.

The gains already made in some of these areas have given U.S. coals economic advantages over indigenous coals in many of the world's important markets.

With so many important factors in our favor

He said

a substantial expansion of our foreign coal markets in a relatively short time can be assured by the determined action and cooperation of industry and Government.

Officials of the larger coal producers and exporters-especially those of Consolidation Coal Co., Eastern Gas & Fuel Associates, and Island Creek and Valley Camp Coal Cos.-have been active abroad throughout the year, particularly in Japan.

George H. Love, chairman of the board and J. W. Kepler, administrative sales vice president of Consolidation Coal Co.; were in Japan the second week of September to talk with steel company officials and to examine at close range the potential market for U.S. coals.

In commenting, Mr. Love said:

were tremendously impressed by Japan's growing economy and the determination of their leaders to increase Japan's share of the world market. Their optimistic plans to have the real probability of success if we for the expansion of their steel industry seem are to judge by the progress made so far. If coal from the United States is to share in the growth of steel, as we certainly hope it will,

it must remain competitive. We came away convinced by their sincerity that everything possible must be done to further reduce the delivered cost of coal in Japan. Opportunity to effect additional reductions lies primarily in transportation charges and we in Consol intend to do all we can to help the Japanese achieve such reductions and thus strengthen U.S. coal's position in the export market.

Executives of Eastern Gas & Fuel Associates, the operations of which last year produced and exported 3 million tons of coal-a million tons of that amount to Japan from its West Virginia mines, spent several weeks in that country last spring. Now, we are informed by the press, the Eastern Gas & Fuel group, again headed by Eli Goldston, president of the parent firm, and William B. Ross, president of a principal subsidiary, are embarking on a worldwide tour to study how to increase the sale of American coal abroad. This is a further gratifying manifestation of aggressive market research and salesmanship.

Concerning this trip and coal markets abroad in their relationship to the West Virginia and national economies, Mr. Ross is reported to have said:

The possibility of increased tonnage abroad will not only aid the industry and West Virin a better export-import balance for the ginia, it is an extremely important factor Nation. The entire coal industry has been gratified by the administration's vigorous action in offering practical high level assistance to stimulate coal exports.

As was pointed out earlier in remarks attributed to Assistant Secretary of the Interior Kelly, coal sales to European markets increased by 25 percent during the past decade-those to Japan at a sensational rate of 115 percent. Japan, although far away, is today second only to Canada as the best foreign customer of our domestic coal.

It is reported that nearly 500,000 mandays of work in U.S. bituminous coal mines were required to produce the coal exported to Japan in 1962. Directly and indirectly, these shipments are declared to have been responsible for more than 7,200 jobs-approximately 2,300 of them in the mines. We are grateful in West Virginia for the part these exports contributed to our much-needed employment and economic stimulation.

We are aware of the hazardousness of the occupation of coal mining. We share with Japan the sorrow visited on so many of its families and its government by the very recent and tragic coal mine disaster. No less tragic, of course, and likewise a reason for our extending sympathy to the Japanese people and government, was the catastrophic train wreck on the same fateful day as the coal mine explosion.

Many of our citizens' lives have been lost in their pursuit of mining and transporting coal. Many more are subjecting themselves to jeopardy daily in the production of coal both for the domestic and foreign markets. They deserve our respect and our admiration, as well as our dedicated efforts to help improve the safety of their places of labor. They likewise deserve the aggressive efforts which are being made to preserve existing markets and to find new ones.