The 75 percent in credit is to be underwritten by the Export-Import Bank, which is financed by American money. I am not proposing this evening anything which would interfere with the proposed wheat sales and corn sales to Russia, if the sales are made for cash. If they are made for gold, as the Senator from Missouri points out, and as he thought, and as I thought the sales would be and we listened to the same testimony in the Committee on Foreign Relations, namely, that the transaction was to help with the balance-of-payments problem-my amendment will not interfere with any cash sale; it would not interfere with any short-term private credit extended by American banks or by exporters who want to supply the credit. My amendment would not interfere with a sale if it were to be repaid in some Russian-made goods which could be converted into American currency. But I do not propose to start financing both sides of the cold war at the same time with American money. I do not propose that we should permit the use of American credit to pick up the possible bad debts of Russia and Hungary in a purchase of this kind. I do not want to force Americans to underwrite the bad faith and the bad credit of Communist dictators. Mr. FULBRIGHT. Mr. President, will the Senator from South Dakota yield? Mr. MUNDT. I yield. Mr. FULBRIGHT. The Senator speaks of a loan. To be accurate, this is the way the transaction would work: Private banks in New York would handle most of this deal by making loans to grain companies in this country. Let us use Cargill as an example. Cargill is one of the large grain dealers. The bank would make an interim loan for the financing of the transaction. The terms would be 25 percent down, and the remainder in 18 months. One-third of the balance would be paid every 6 months. What the Export-Import Bank would do would be, for a fee, to insure payment. Is it not true that in the case of certain sales of grain by Canadians to Communist-bloc countries, the Canadians have come to New York and have used either the Export-Import Bank or a private bank that is, American capital to underwrite the insurance payment of the short-term credits when they come due? Mr. MUNDT. I believe they have used private capital. I am not aware that they have used Export-Import Bank capital. My amendment does not prevent private banks extending credit to Russia. Mr. FULBRIGHT. Is it not true that there has been no default in the case of Canadian wheat? Mr. MUNDT. Not yet. After all, there would be precious little time for default as yet. Most of the wheat is not yet on the ocean. Mr. FULBRIGHT. But substantial sales were made to China 2 or 3 years ago. Mr. MUNDT. Most of those were on a long-term credit basis. There has been no opportunity for default on the credit for those transactions. CIX-1378 Mr. FULBRIGHT. I do not know how long ago those transactions were made. They were also arranged on somewhat similar terms-not 5- or 10-year terms, but relatively short terms. In the case of both U.S. wheat and Canadian wheat, it is generally expected that the terms will provide 18 months for the three quarters of the remainder to be sold. All the Export-Import Bank will do, for a fee, will be to insure for the payments. They have already done this, as the Senator has indicated, according to the committee staff memorandum which I placed in the RECORD, and also in the answers to questions which the Senator from South Dakota himself submitted to the ExportImport Bank. This procedure has been followed twice in the case of Yugoslavia and also in connection with many other countries. Mr. MUNDT. No other Communistbloc countries. Mr. FULBRIGHT. No; we refused to sell to them. sell to them. There have been many speeches on the floor, some for and some against the wheat deal. As I recall, one was made by the distinguished Senator from Kansas [Mr. CARLSON], and another by the Senator from North Dakota, or perhaps it was the Senator from South Dakota-not the senior Senator from South Dakota [Mr. MUNDT], but the junior Senator from South Dakota [Mr. McGOVERN], approving these sales. This announcement is one aspect of the transaction. If I am properly informed, the balance pays 5 percent. I believe the memorandum states 5 percent. Mr. MUNDT. I believe the Senator is correct about the rate. Mr. FULBRIGHT. Part of this pays for the insurance. I understand that the Senator disapproves of such sales. I notice that in his amendment he provides a limitation that it will apply only to the purchase of grain or any other agricultural commodity. Apparently he does not want the amendment to apply to the purchase of machine tools of similar products. Mr. MUNDT. As the Senator knows, we have not been shipping such articles to Russia. Mr. FULBRIGHT. At any rate, I point out that I have no particular interest in wheat. However, I do approve of selling it to the Communist bloc, rather than to Germany or some other free country which then will be able to sell it to the Communist bloc, and thus make a profit on it. I believe we have been very improvident in allowing our prejudice to override our business judgment. But I point out that this amendment does not relate to aid. The other night the Senator said we make some great concession by negotiating a price for shipment in American bottoms. However, that is not a concession; and this amendment does not relate to foreign aid. The amendment has nothing to do with the bill. We have already loaded down the bill enough with irrelevant provisions. I do not think there is anything to the amendment of the Senator from South Dakota; but if there is, I believe it should be fought out on its own merits, and should stand on its own feet. We should not allow the prejudice which has accumulated against foreign aid to be injected into our consideration of this proposal, which deals with the sale of wheat and corn. Most of the Senators I have heard speak who are interested in the sale of wheat and corn—and many Senators are-are interested in having it sold for part cash and part short-term credits. No long-term credits are involved. But it seems to me that this amendment, which might be a complete obstacle to the sale of our wheat and corn, would be very unwise. So I hope the Senator from South Dakota will not press for its inclusion in this bill, for the bill is already badly overloaded with irrelevant provisions, and the bill is now large enough and complicated enough as it is. It has been emasculated to the point where we can scarcely recognize the bill for what it is intended to be, for now the bill deals with fish problems and many other matters unrelated to foreign aid. So I hope the Senator from South Dakota will admit that this amendment is not related to the foreign aid program. Mr. MUNDT. I most definitely consider that the amendment is related to the foreign aid program. Mr. FULBRIGHT. In what way? Mr. MUNDT. Because it calls for a determination of whether, for the first time in 15 years of providing foreign aid, we want to proceed on the basis of providing grain and other products through public American credits to the Communist bloc countries or whether we wish to limit our aid to the countries of the free world. Only a short time ago the Senate adopted the Cooper amendment, which states that perhaps we have given our aid too long to the free world countries. Mr. FULBRIGHT. That amendment does not contain any such provision. vides that a study shall be made, and Mr. MUNDT. Yes, it does, it prothat if it is found proper to end our foreign aid by the end of the fiscal year 1965, it is then to stop. Am I correct in my understanding of the Cooper amendment? I note that the Senator from Kentucky is nodding his head in enthusiastic affirmation, so I am sure I am correct in my understanding of his amendment. Senator from South Dakota yield? Mr. MUNDT. Mr. President, I wish to have the Senate proceed to act on my amendment. Mr. DODD. Mr. President, let me point out to the Senator from South Dakota that I wish to speak in support of his amendment. Mr. MUNDT. Very well; I yield to the Senator from Connecticut. Mr. DODD. Mr. President, I realize that the Senate is very close to voting on this question. However, preliminarily I wish to emphasize the point that earlier this year the Senate made a complete reversal of the position it previously had taken on the question of aid to Communist countries. Last year, and for many years theretofore, strenuous efforts were made here to block the giving of our aid to Communist countries; but each time those efforts were made, all the forces of the administration in power and of the Senate leadership were marshaled against us. credit of the American taxpayers is in- Mr. DODD. Very well, I am sorry I Mr. President, it is said that we should approach these matters from the stand I remember fighting the battle when point of a businessman. I was a Member of the House. Dire predictions were made in regard to what would happen to our country, and even to our system of government, if Congress voted such a restriction. Those arguments always prevailed, and in that struggle I found that I was never on the winning side. Only last year, those of us who sought to stop the giving of such aid met with a crushing defeat here on the floor of the Senate. Last year I said—and my statement is in the RECORD-that although we were defeated, that would be the last year we would be defeated, because the American people would never endure another year of giving our aid to Red nations aid which has proved a gigantic and a complete failure. I said that the advocacy of such aid would collapse of its own error. This year, the familiar effort to stop such aid was made again; but the opposition vanished like an Arab in the night. Thus far in the current debate, I have not spoken at all on this issue. I wanted other Senators to take the lead. And I was happy that other Senators took up the fight. The Senator from Wisconsin [Mr. PROXMIRE] and many other Senators whom I could name did far better than I could have done with it. Our amendments so often defeated and blood bespattered-were embraced this time without opposition; and the solemn pronouncements of the past about the necessity of such aid were heard no more. I do not want this sudden and amazing reversal of form to pass unnoticed, for it is proof that even the most sophisticated and highly placed experts can be totally wrong, and that once in a while the plain and simple folk in this land who see things only in terms of either black or white can be totally right. I thank God, Mr. President, that I am one of them. Yes, I see fundamental things as either black or white, and I hope I do so to the end of my life. I hope that now it will be recognized that sometimes those who proceed on that basis can be totally correct. Tonight, the Senator from South Dakota proposes, on the eve of the final action of the Senate on this bill, that this amendment be adopted. I shall vote for the amendment, but I am troubled when he asks, "Why do we not sell our wheat for gold?" I think that position debases us. Mr. MUNDT. Mr. President, the Senator from Connecticut has inadvertently misquoted what I said. I have not said that we should sell our wheat for gold. I said that to sell it for gold would be bad enough, because it would put us on the side of aiding the enemy. But I also said that to sell the wheat at the expense and through use of the public SEVERAL SENATORS. Vote! Vote! Vote! Mr. MUNDT. Mr. President, I thank the Senator for his contribution. I have waited a long time to get the floor to explain my amendment. It is only the second speech that I have made on the subject of foreign aid. I am a stubborn Dutchman, and I do not believe that I shall be stampeded into quitting by Senators shouting "Vote." I believe I can restrain myself to a few more statements However, I did not make my share; in- if we continue to have the fine attention stead, I became a Senator. Well, Mr. President, my father was a businessman, and I was raised in New England, where all are taught how to make money. But, I am as sure as I am standing here now that this is the wrong policy for our country at this hour. I think it debases us to argue that Russia needs wheat and we need gold. I would rather give the wheat to them, and send it there in American bottoms, on ships flying the American flag, if the Russian people are hungry. If they are hungry, of course, we are glad to help feed them and to give it to them for that is the habit of the generous American people. But when we sell the wheat to them, we should let them pay a fair price for iteven perhaps a little less than others pay. However, when we aid them in this way, let us obtain from them some concessions. Why do not we say to them, "In return for receiving our wheat, you must stop causing provocations on the Berlin Autobahn. You must stop imprisoning innocent American citizensand you must stop committing aggression against us and our friends." But, the policy seems to be not to request or require concessions from them, but always to provide concessions from us. I tell Senators that if we continue on in the way we have been going, catastrophe will follow. Let us not argue that the Canadians are selling wheat, so why should we not get in on the deal, or that someone else is selling wheat, and why should we not get in on the deal. Every time we sell an ounce of grain for profit-for gold-to our enemy, we are weakening the free world. I am glad that the amendment has been offered. I still do not believe it is as clear as I would like to see it. I do not think the people of our country really understand what we are doing. Because we were first told that it was one transaction, one deal, for cash on the barrelhead. We were told that they would pay us and that we would get rid of some surplus wheat. We would get some gold with which we could reduce our deficiency in the balance of payments. We now find that that is not the situation at all. It is not one deal. It is many deals. Sales of wheat and corn are proposed to be made to Hungary, Bulgaria, and Rumania. The deal is not for cash on the barrelhead but a credit arrangement of 18 months or more. That is not a shortterm loan in any banking practice at all. The Export-Import Bank would guarantee the loan. So the American taxpayer is stuck through slick high finance deals. Nothing but bad can come from the transaction. We will regret it if we pursue that policy. that we have had up to the present hour. I know and all Senators know that their constituents and the public generally will be interested in the important and significant vote which might create a whole new departure in the foreign aid and trade concept of this country. I want Senators to have all the information that I have. I consider our decision on this amendment one of the most important and far reaching to be made in the current session of this 88th Congress. Mr. President, I ask unanimous consent to have printed at this point in the RECORD a letter addressed to Hon. Harold F. Linder, President of the ExportImport Bank, Washington, D.C., by Pat Holt, acting chief of staff of the Committee on Foreign Relations, and the reply by Mr. Walter C. Sauer. There being no objection, the letters were ordered to be printed in the RECORD, as follows: EXPORT-IMPORT BANK OF WASHINGTON, I am replying to your letter of yesterday, in DEAR MR. HOLT: In Mr. Linder's absence 1. The Export-Import Bank has two different programs under which it guarantees credits extended by U.S. commercial banks for financing U.S. exports. One program covers agricultural commodity and other large-scale export transactions, such as the sale of jet aircraft. The other program involves the export of capital goods or equipment of relatively modest amounts. In the case of agricultural commodities and jet aircraft, the Export-Import Bank guarantee the U.S. commercial bank for the full amount of loss that might be sustained by the commercial bank because of failure of the foreign buyer to pay his debt-whatever may be the cause of the buyer's failure to pay. Thus, this guarantee may be described as a "100-percent all-risk guarantee." It should be noted that, in the case of agricultural commodities, the 100-percent guarfull value of the transaction since there is no requirement for any cash payment by the buyer or any participation by the seller. In the case of jet aircraft, however, the 100percent guarantee to the commercial bank constitutes only about 65 percent of the value of the transaction since the buyer is required to make a 20-percent cash payment and the seller is required to take a 15-percent unguaranteed participation. antee to the commercial bank constitutes the In the case of the ordinary sale of capital goods or equipment, the Export-Import Bank guarantees the U.S. commercial bank for the full amount of loss arising from socalled political risks and for part of the loss (ranging from 50 to 75 percent depending on the term of the financing) which results from a credit failure Thus, this guarantee may be described as a "100-percent political risk and a partial credit risk guarantee." Here again it should be noted that the guarantee to the commercial bank is only with respect to the financed portion-that is, the amount remaining after the buyer has made a cash payment of 10 percent to 20 percent and the seller has taken at least a 15-percent nonguaranteed participation. It might be mentioned that in the case of the 100-percent all-risk guarantee the commercial bank collects interest on its funds at a rate appreciably lower than in the case of the 100-percent political risk and partial credit risk guarantee. In the fiscal years 1962 and 1963 the Export-Import Bank issued $267.3 million of 100-percent all-risk guarantees and $178.7 million of 100-percent political risk and partial credit risk guarantees. Thus, for the period involved, the percentage of 100-percent guarantees was 60 percent as against 40 percent for partial gaurantees. 2. Since 1948 the Export-Import Bank has issued two commercial bank guarantees for exports to Communist bloc countries. These two guarantees amounted to $536,649 and covered the sale of capital goods to Yugoslavia. It might be mentioned, however, that during the same period the Export-Import Bank authorized $105 million of direct credits to Yugoslavia to finance U.S. capital goods and equipment. 3. The answer to question No. 3 is embodied in our answer to question No. 1. 4. In the case of capital goods and equipment, the guarantees of the Export-Import Bank cover credit sales ranging from 1 to 5 years. Large jet aircraft carry a term of 7 years. In the case of agricultural commodities, the guarantees of the Export-Import Bank cover credit sales on terms up to 18 months. 5. In the case of the sale by U.S. exporters of corn and other grains to Hungary, the part to be played by the Export-Import Bank is as follows: The Export-Import Bank will issue its guarantee to the U.S. commercial bank financing the transaction provided the transaction meets certain criteria. Hungary must make a cash payment of 25 percent of the value of the purchase contract prior to shipment of the grain. The balance of 75 percent (excluding the cost of freight when shipment is made on a foreign-flag vessel) is payable over a period of 18 months with one-third payable every 6 months. Interest on outstanding balances is payable semiannually at the rate of 5 percent per annum. The obligations evidencing the 18month credit are to be the obligations of the Hungarian Foreign Trade Bank backed by the undertakings of the National Bank of Hungary and the Minister of Finance of Hungary. The issuance of the guarantee by the Export-Import Bank is further conditioned upon the seller of the grain having obtained an export license from the Department of Commerce. When the foregoing conditions are met, the Export-Import Bank guarantees the commercial bank for the full amount of the loss that the commercial bank may sustain for failure of the Hungarian obligors to pay their debt whatever may be the cause of the failure to pay. As indicated, this loss could be as much as 75 percent of the value of the grain since this is the maximum amount the commercial bank will finance on credit. 6. The Maritime Administration, under the jurisdiction of the Department of Commerce, makes determinations on waivers for shipment on American bottoms for exports financed or guaranteed by the ExportImport Bank. To the extent there may be waivers on wheat and corn sales to the U.S.S.R. and its satellites, these are being handled by the Maritime Administration. For your information, I am enclosing Department of Commerce Bulletin No. 883, dated as of yesterday, dealing with the matter of grain shipments to the Soviet bloc. 7. The answer to question No. 5 embraces the answer to this question; that is, if for any reason-whether political or commercial-the Hungarian obligors do not pay the obligations evidencing the debt, the ExportImport Bank is obligated under its guarantee to make good to the U.S. commercial bank which has financed the obligations. As indicated in the answer to question No. 1, this is the same undertaking that the ExportImport Bank enters into with respect to sales of agricultural commodities and jet aircraft in any country. As is further pointed out in the answer to question No. 1, if the loss results from a political risk as for instance "any political changes in the country to which the credit is extended,” the Export-Import Bank covers the loss not only in the case of the proposed guarantees of grain sales to the Soviet bloc but under all of its guarantee activities. Sincerely yours, WALTER C. SAUER. NOVEMBER 13, 1963. Hon. HAROLD F. LINDER, President, Export-Import Bank of Washington, Washington, D.C. DEAR MR. LINDER: A member of the Com mittee on Foreign Relations has requested that I transmit the following questions to you. He asks that the answers be furnished in writing by noon, Thursday, November 14. 1. Are all Export-Import Bank guarantees covering sales to free world countries made for 100 percent of the full amount of the transaction? If not, what percentage are for 100 percent; what percentage are for 75 percent; what percentage for some other percentage of coverage? 2. Please provide a list of all guarantees covering sale to Communist bloc countries which have been made by Export-Import Bank since 1948. 3. Are all guarantees covering sales to free world countries total guarantees against any contingency or circumstance or are some of them limited to specified risks or types of risks? If so, what percentage of each? 4. Are all Export-Import Bank guarantees covering sales to free world countries made to cover 18-month period? If not, what percentage are for 18 months? What percentage for a longer coverage? What percentage for a shorter coverage? Please indicate how much longer or how much shorter are the periods of coverage which differ from the 18-month guarantee. 5. Please provide the full terms of the agreement on the purchase of corn by Hungary-especially the part played by the Export-Import Bank in this purchase agreement. 6. What is the law on waiver on shipments in American bottoms in event the guarantee by Export-Import Bank is made? If waiver was made on our recent wheat and corn sales to Russia and Hungary, who granted the waiver and what percent was waived from being carried in American bottoms? Who requested the waiver? 7. Does this guarantee also cover losses from any political changes in the country to which credit is extended? If so, is this a normal guarantee? Sincerely yours, PAT M. HOLT, Acting Chief of Staff. Mr. MUNDT. The answer letter was received by Mr. Holt at noon The answer to the today. I should like to read a portion of the letter because it correctly authenticates what the chairman of the Foreign Relations Committee has said about the nature of the transaction. Question No. 5 and the answer by Mr. Linder, are as follows: 5. In the case of the sale by U.S. exporters of corn and other grains to Hungary, the part to be played by the Export-Import Bank is as follows: The Export-Import Bank will issue its guarantee to the U.S. comthe transaction mercial bank financing provided the transaction meets certain criteria. Hungary must make a cash payment of 25 percent of the value of the purchase contract prior to shipment of the grain. The balance of 75 percent (excluding the cost of freight when shipment is made on a foreign-flag vessel) is payable over a period of 18 months with one-third payable every 6 months. Interest on outstanding balances is payable semiannually at the rate of 5 percent per annum. The obligations evidencing the 18-month credit are to be the obligations of the Hungarian Foreign Trade Bank A Communist government institution backed by the undertakings of the National Bank of Hungary A Communist banking institutionand the Minister of Finance of Hungary One of the functionaries of the Communist dictatorship in charge of Hungary. Continuing to read from the letter: The issuance of the guarantee by the Export-Import Bank is further conditioned upon the seller of the grain having obtained an export license from the Department of Commerce. I ask Senators to listen to the next paragraph, because it is the one that Senators will talk about back home, and Senators should wish to consult with their consciences before they really decide to vote to endorse that kind of a new departure: When the foregoing conditions are met, the Export-Import Bank guarantees the commercial bank for the full amount of the loss that the commercial bank may sustain for failure of the Hungarian obligors to pay their debt whatever may be the cause of the failure to pay. As indicated, the loan could be as much as 75 percent of the value of the grain, since that is the maximum amount the commercial bank would finance on And remember this could incredit. volve 75 percent of the entire proposed $250 million grain sales program to the Communist bloc. Mr. HUMPHREY. Mr. President, will the Senator yield? Mr. MUNDT. I should like to point out one other statement, and then I shall yield. Senators may wonder what kind of credit we are being asked to endorse. What we are asked to do is to put the name of every constituent-every American taxpayer-on the promissory note guaranteeing as an endorser that Red Russia will pay the note. Each taxpayer becomes an endorser of the note and becomes liable. Our constituents would become guarantors of the payment. Before taking that action, we ought to look at the credit risk. Let us look at the credit repayment record of Hungary and Russia. Hungary has been in the business of obtaining loans from us for a long time. She started back on October 3, 1944. We had advanced a total of $15,917,000 of credits to Hungary prior to this new corn and wheat sales venture. The earlier credits were for the sale of oversea surpluses, but it is the same kind of trade she is now engaged in in relation to surplus wheat. The unpaid balance is over $9 million as of now. We are not now asking them to pay the $9 million back before guaranteeing these new credits. We say, "We will give you more credit and back it up with American taxpayers' money in the Export-Import Bank, and hope that you are a better creditor now than you have been in the past." We let them have the earlier money at 2% percent interest, which is a smaller rate of interest than it costs the American taxpayer to carry the loan. I also have the bad debt figures for Czechoslovakia and Yugoslavia. But tonight I should like to mention Russia. We have been loaning Russia money in one way or another since March 11, 1941. The total amount advanced, not including war loans, is $222,494,574, of which $205,709,633 remains unpaid. The rate of interest on those unpaid loans is only 2% percent. We are charging Russia today a preferential interest rate cheaper than that charged our American war veterans. Mr. President, I believe it was a good thing that we adopted the Cooper amendment. We should analyze where we stand in the aid program. We are getting kind of mixed up. We have gone so far in relation to the free countries that we are now proposing to pick up the tab for the Communist countries. We are seeking to aid our enemies. These unpaid loans are in addition to the $11 billion of lend-lease that we gave to Red Russia. But, to be honest and fair, we were fighting a war jointly together at the time. We decided that we ought to get back only about $1 billion of the $11 billion. They would not pay it. We negotiated the debt down to $800 million. They have not paid that amount, and they will not pay for the wheat and corn. American taxpayers will pay it if the Senate rejects my amendment, because the taxpayers will have become endorsers with with Nikita Khrushchev on his promissory note. Mr. HUMPHREY. Mr. President, will the Senator yield? Mr. MUNDT. I yield to the Senator from Minnesota. Mr. HUMPHREY. The Senator from South Dakota has said that we have introduced a new concept into aid. I only desire to say that what we are talking about is trade. It is not aid. I should like the Senator from South Dakota to recognize-and I know that he does-that the Canadians have export insurance. They have had it for years. The Germans initiated export insurance long before we did. The Export-Import Bank has only recently engaged in export insurance at the insistence of Members of this body-and rightly so-both on what we call short-term loans and medium-term loans-anywhere from 18 months up to 5 years-for export purposes. It is an insurance program, as American as the Fourth of July and apple pie-insurance. Today an article published in the New York Times tells us that the German Government has sent trade missions into all the eastern bloc countries, and yesterday signed up substantial up substantial trade agreements with Poland and with Rumania. They have had trade missions in Czechoslovakia and Bulgaria. They have done hundreds of millions of dollars of direct business with the Soviet Union, and many of the times they have been selling American grain. They have insured it. It is insured. There is not a single export of any degree that goes from Germany to any part of the world that is not insured. That has been the secret of the German export policy. I know that the Senator from South from South Dakota points to the record of unpaid debts. I challenge the Senator from South Dakota to demonstrate to me, or to this body, that Hungary, for example-a govbody, that Hungary, for example-a government the Senator quoted as of 1944, which did not happen to be a Communist country at that time-has defaulted on country at that time-has defaulted on a commercial transaction. I say-and I I say and I am prepared to back it up-that the Hungarians have as much of an international credit rating on a commercial transaction as any other country in the world. One of the reasons for that is that they need the goods. Furthermore, the Chinese Communists have not defaulted upon the Canadians. The last Polish purchase in Canada was financed out of New York banks. The depositors in the New York banks are depositors in the New York banks are American taxpayers; and if the New York banks go broke the Government of the United States has them insured. There is insurance. There is insurance under the Federal Deposit Insurance Corporation and under a host of other policies. Mr. MUNDT. To set the record straight, that is paid for out of a fund created by insurance premiums paid for by the banks. Mr. HUMPHREY. The Export-Import Bank insurance is paid for by the port Bank insurance is paid for by the people who do the exporting. This is no gift. Mr. MUNDT. It is paid by American taxpayers. Mr. HUMPHREY. Not at all, let me say to the Senator from South Dakota. Mr. MUNDT. They have to make this up because Congress appropriates the money to go in the Bank. We are talking about the insurance. We must appropriate the money to cover the Bank's priate the money to cover the Bank's deficits. Mr. HUMPHREY. The Export-Import Bank insurance is paid for like an port Bank insurance is paid for like an insurance premium to the Prudential Life Insurance Co. or the Metropolitan Life Insurance Co. They will make money out of it. They are not losing money. The Export-Import Bank has a money. The Export-Import Bank has a record of making money for the Treasury on direct loans. The Senator from South Dakota cannot produce evidence of losses on the aggregate total for the Export-Import Bank. Mr. MUNDT. The record of repayment is good because the Export-Import Bank has not loaned money to Communist countries. Mr. HUMPHREY. They have loaned to some poor credit risks. Mr. MUNDT. I wish that Hungary would pay back the $900 million which is in default at the present time. Mr. HUMPHREY. The only thing I wish to say in reply is, it is easy to say, "If you sell this to Russia, it looks as though we are giving aid to Russia," but the simple truth is that we are going to sell the wheat to somebody, somewhere. We are either going to sell or trade with Russia and permit it to be a direct sale, over which we will have some control; or sell to France, or to Italy, or to Germany-which we have been doing-and they are going to sell to Russia. Their insurance companies will insure sales. Every Senator knows that. us stop kidding ourselves. Let Every Senator knows that within the past few months a number of sales have been made directly by Canada and Australia to the Soviet Union, both of whom are our allies. We also know that the Germans sold 450,000 tons of flour last month to the Soviet Union. We know it was an insured program, exactly as this would be. Sometimes I wonder if we do not wish merely to give aid. I suggest that one of the reasons we have a foreign aid program as big as this one is that Congress is so involved in emotionalism that it cannot get down to do business. One of the answers to the aid program is to trade, to sell, to make some money for a change, to do business. If we sell Russia some wheat, they may not have as much to spend for atom bombs. An old farmer up in South Dakota, I believe, said: I am willing to sell Russia anything it cannot shoot back. That makes good sense. He did not get his mind cluttered up with the CONGRESSIONAL RECORD. He had some sense about what he was doing. He thought it was much better to sell than to give it away. He thought it was better to sell through American hands than to sell through a middleman. through a middleman. I believe the old farmer has more sense than the Senate. Mr. MUNDT. The Senator from Minnesota has made his eloquent argument to sell grain and get moving, to sell even to Red countries, to Communist countries, wheat and grain. That is not the point at issue. The question is whether we will underwrite the credit of the country which buys it, even if it is a Communist country. That is what is involved. Many fine merchants in this country have gone broke trying to sell too much to too many whose credit is no good. I submit what is in the record-the whole history of America indicates that a Communist promise on a promissory note or anything else is not worth the ink with which it is written. There is much difference between having an insurance policy paid for by premiums, by people engaged for profit in the export business, and a program that causes the taxpayers at home involuntarily to shoulder the risk of bad faith and the bad debts of Communist countries. It so happens that I am the chairman of the International Finance Subcommittee of the Banking and Currency Committee. This subcommittee has Mr. HOLLAND. Mr. President, will jurisdiction over the Export-Import the Senator yield? Mr. MUNDT. I yield. I Mr. HOLLAND. Mr. President, I am deeply disturbed by this discussion. have had many letters from many constituents in my State protesting against the sale of wheat to Communist countries. I have obtained statements from those in authority dealing with this matter, and I have tried to send back the official reasons to my people-that getting rid of the surplus and of the storage problem created by that surplus would better our balance-of-payments problem; that the transaction shows to the world our tremendous productive capacity and raises our prestige. Bank. We held rather extensive hearings earlier this year with respect to the powers and the duties of that splendid institution. I institution. Its chairman is Mr. Linder, a patriotic American, who is as much interested in the security and safety of our country as any Senator in the Chamber at this moment. I believe it is about time, Mr. President, that we stopped acting as 100 separate Secretaries of State in the Senate. If there is need to curtail the obligations, the privileges, and the rights of the Export-Import Bank, let the Senator from South Dakota introduce a bill and have it referred to the Committee on Banking and Currency. I will guarantee it an early hearing. Let us not-in what I might say is perhaps the last gasp of Joe McCarthyism-pass this amendment tonight, without consideration, without hearings, without any understanding of the international implications of what we are about to do. I hope this amendment will be overwhelmingly defeated. Those answers have been given to me, and there is some weight to them; in addition that we are selling wheat to Germany, and Germany is turning it into flour, as suggested by the Senator from Minnesota. And that same wheat, in the shape of flour, as processed, with added value attached, has gone on to Russia and other Communist places. I am frank to say that I have not known that we were underwriting, in public credit, three-quarters of the sale price of this wheat. Mr. MUNDT. I believe there was no reason for the Senator to know that, because it was not announced until November 5, and most of the correspondence of the Senator, I am sure, preceded that date. Mr. HOLLAND. I am frank to say that that new fact creates a very disturbing situation. We have said "Let us not trade with Communist governments. Let us cut off the purchase of tobacco from Cuba. Let us thereby destroy certain businesses in Tampa. Let us put out of employment several hundred workers. And, at the same time, let us not ship to them the things which they need. Let us go further and insist that our allies not ship to Cuba the things which they need. Let us go further and say that if our allies do that, we will not let the ships that have gone into Cuban ports with this material come into our ports." How in heaven's name can we justify this thing we are doing now as against our fixed policy down there? I have I have been seeking to defend it, and seeking to pass on explanations which sounded to me as if they had some weight to them; but when it comes out here that instead of getting payment in gold we are instead publicly financing a credit on the whole proposal by three-quarters, I believe that projects a decidedly weaker picture. I am glad the Senator from South Dakota has brought this up. Mr. MUNDT. I thank the Senator for his persuasive and pertinent support. Mr. President, I yield the floor. Mr. CLARK. Mr. President, I apologize to the Senate for withholding the vote on this matter for a minute or two. I rise in the hope that we can make our decision without any undue emotion. SEVERAL SENATORS. Vote! Vote! Vote! Mr. DODD. Mr. President, I know Senators are shouting "Vote!" This is a critical issue. I do not wish to delay my colleagues. I should like to go home, too. But I do not think there is any more critical issue confronting the Senate. If my mail is any indication, the people expect us to carefully consider this issue, and they do not expect us to shout "Vote, vote," at 9:30, after a serious amendment has been offered by the Senator from South Dakota. What is wrong is the principle involved. Some day Senators will say this is so, whether I am here or not. We are talking about our implacable enemies, devoted to our destruction. We are talking about whether or not to give them help. I say we should not do it unless we can get something significant in return. All the talk about whether the Germans do it or the Canadians do it does not make it right. If we are right about this issue, if we are the citadel of freedom, if we are asking our people to pour out their substance to defeat this threat, on what ground can it be argued that we should give them aid in the guise of trade. I add one addendum to that thought: If we could get something for the free world, I would be in favor of it. If we could get some concession, some lessening of the tension in Berlin, some cessation of the provocations and hostilities toward our men on the autobahn, some way of stopping seizures of our citizens such as Professor Barghoorn from Connecticut, if we could get something in Cuba-if we could get some concession, somewhere, that would be one thing. But we continue to tumble head over heels every day to give to them and get nothing in return. Mr. President, it is wrong. It is not a question of gold, dollars, or trade. It is a question of whether or not it is wrong. Our critics can laugh, but I am sure we are right. It is time we talked about it. We are accused of talking in emotional terms. I speak in terms of what is right or wrong, what is black or white. It interests me, it intrigues me, it comforts me to know that I know of no labor organization that has advocated this bill. The little people of this country and of the world know better. I know of no small-scale farmers-and I live among them-who have advocated it. The Connecticut Farm Bureau is against it. Who is for the bill? I ask this in all charity. The chamber of commerce, the bankers who had their meeting in this city, are for it. Now I know many good bankers. I do not want to put a blanket indictment on them. But I think it is interesting that the bankers and the chamber of commerce are the only groups of national significance that are for the bill. They want to make money. When Lenin said that when we get ready to hang the capitalists, they will sell to us the rope with which to do it, he was more prophetic than he thought he was. And the chamber of commerce and the bankers association lend credence to his declaration. I am not interested in all the arguments about interest rates and guarantees. The question is the cause of freedom against that of tyranny and slavery; and we are giving comfort to our enemies, at a time when we are spending billions of dollars to resist them. Historians will say, "What fools-they sowed the seeds of their own destruction." I urge my colleagues to vote for the amendment. Mr. YOUNG of North Dakota. Mr. President, our trade with Russia is not the question at issue. In the last 11 years we bought $92 million more than we sold to them. Germany alone has had trade with the with the bloc countries amounting to $700 million in the last year. The question of whether we should trade with them is not involved; we have been. This amendment singles out grain. That is the extent to which it would prohibit guarantees against credit. Why single out grain? Why not single out industrial machinery? Why not refuse to extend credit for that purpose? Why leave in the restriction against grain only? I cannot understand why grain is the only one commodity to be discriminated against. Mr. MUNDT. Mr. President, will the Senator yield? Mr. YOUNG of North Dakota. I yield. Mr. MUNDT. I should like to answer that question. I think it is a legitimate question. The reason we singled out |