for his loss by the U.S. Government under the guarantee. Our Government would then step into the shoes of the former owner and acquire all his legal rights against the foreign government. If necessary, the U.S. Government can sue the foreign government before an international tribunal or arbitration commission to obtain reimbursement for the funds it had previously paid out to the American investor.

The confiscations of American businesses in Cuba by the Castro regime are only too familiar to us all. Although the guarantee program had been in existence in Cuba long before Castro's ascent to power, none of the U.S. companies operating there had taken advantage of the insurance against expropriation. The lesson was well learned through this sad experience, and since that time applications for investment guarantees have increased increased markedly. Presently pending are over 1,000 applications for investment guarantees amounting to more than $4 billion.

In view of the unsettled conditions in the world today, the frequent talk about nationalization of foreign enterprises, and the newspaper articles on bombings by Communist rebels, one might expect that the Government must have paid out substantial amounts of money under these guarantees. Yet, amazingly enough, to date the only loss suffered by the Government is that one case I already mentioned, the Pluswood Co. in Oshkosh, Wis., where the net loss equaled about $9,000. Thus, for over $1 billion in insurance coverage, the U.S. Treasury has had to pay out only $9,000 and that small outlay has been more than amply offset by the premiums collected on the policies-over $12 million as of June 1963.

Although the program has been operating since 1948, no guaranteed investment has ever been nationalized by a foreign government and no guaranteed investment has yet been damaged by war, revolution, or insurrection. Of course, it is possible that in the future these events could occur and that is why the guarantees are available. But the Government has taken several steps to minimize the likelihood of their occurrence. Before the program may be instituted in any country, suitable arrangements must be made by the government of that nation to protect the interest of the United States. This generally takes the form of an international agreement in which the foreign government agrees to submit any disputes with the United States arising out of investment guarantee matters to international arbitration. In this manner, the foreign nation assumes both a legal and moral obligation to respect the rights of the American investor and his Government. At present, 57 less developed countries have signed these agreements and implemented the program.

Each individual investment must also receive the approval of the government of the host country before an investment guarantee is issued. As of June this year almost 700 applications for guarantees had received foreign government approval in nations throughout the free world.

I am pleased that the Foreign Relations Committee has approved the full administration request for increasing the ceiling on specific risk guarantees from $1.3 to $2.5 billion. This request also has been approved by the House.

I am also pleased that the Foreign Relations Committee rejected a provision lations Committee rejected a provision in the House bill which would make an investment guarantee agreement a condition for aid. I agree with the committee's statement on page 14 of its report that such a provision would not port that such a provision would not accomplish the intended purpose of promoting U.S. investment. On the contrary, I think there is ample evidence, especially in Latin America, that such a provision would seriously jeopardize U.S. private investment. I hope our conferees will stand firm in conference on dropping this very unwise provision, which was adopted by the House after brief debate, and after being rejected in the House Foreign Affairs Committee.

Fifth. Guarantees involving $30.9 million have been authorized to cover extended risks of U.S. private investments in self-liquidating pilot housing projects in self-liquidating pilot housing projects in Latin America. One nonhousing extended risk guarantee has been authorized to assist in the financing of an integrated petrochemical complex in Argentina involving five U.S. firms.

Sixth. There has been vigorous support of intermediate credit institutions. Since September 1951, over 1 billion in dollars and dollar equivalents of local currency has been lent to 85 institutions in 46 countries for relending by them to qualified private subborrowers in the fields of industry, housing, and agriculture.

In Colombia, for example, a dairy company has completed an investment survey and is proceeding with a joint venture to produce dairy products. A venture to produce dairy products. A number of U.S. firms are considering number of U.S. firms are considering partnership ventures in the fields of food partnership ventures in the fields of food processing, meatpacking, metalworking, lumber, and building materials.

In Nigeria, another major dairy company, with U.S. assistance, has committed itself to make a half million dollar investment to build a reconstituted milk plant in Lagos with Nigeria partners; it has applied for a U.S. political risk investment guaranty.

In Thailand, a joint venture between a U.S. cable and wire manufacturer and a local Thai firm is under active negotiation as a direct result of U.S. efforts. Our foreign aid officials also are working with a potential investor in an aluminum fabricating plant in Thailand.

In Pakistan, an investment proposal for a tire plant is now going forward, and investment survey grants have been approved for a carbon black plant, a machine tool operation, a pulp and paper manufacturing plant, a plastics firm, and a seafood processing venture.

What about the effect of these programs on our balance of payments? A recent survey of investments covered by specific risk guaranties showed that 88 percent of the investment was in the form of exports of U.S. goods of equipment, materials, engineering-leaving an initial dollar outflow of 12 percent of the investment. In addition, we can ex

pect not only a dollar return on these investments in the future, but also in increased exports of American components and equipment to supply these new factories.

A number of other measures are being taken by our Government toward improving the local climate for investment and stimulating the growth of local private enterprise. These include: Working with host governments to induce local changes and reforms in tax, tariff, monetary and agrarian policy; assisting in organizing and financing local investment centers, development institutions and productivity centers for identifying investment opportunities, bringing together local and foreign investments, training and assisting local businessmen in improving business administration; conducting feasibility studies to establish what investment opportunities exist by industry for particular countries; conducting a major participant training program to provide training, and the like. One good example is the school of business administration being established in Peru by U.S. experts, which the Peruvians themselves will later operate. This is the first graduate school of business administration in all of Latin America. It is a pioneering step toward developing the entrepreneurial and business skills which Latin Americans need in order to spur the growth of private business.

Through our foreign aid program we are attempting to spread by every possible means a wider knowledge in the developing countries of what modern responsible private business leadership can do to speed up economic development. In order for us to achieve the foreign aid goal of self-sustaining economic growth, we must strengthen the local private sector, including the role of U.S. industry, by applying basic American business principles-good pay for trained and productive workers; large volume sales on small net profit; mass production and mass consumption. The success of these principles in fostering economic growth, so amply demonstrated by our own econnomy, has also been demonstrated in recent years in the successful growth of the economies of Greece, Israel, Mexico, the Philippines and Taiwan.

In a sense, much of our foreign aid is like a consumer credit operation selling goods on time. Foreign aid is financing capital projects and investments which will help the countries receiving aid to become self-supporting and to repay their loans from us. After World War II, we provided substantial economic assistance to Western Europe and Japan. We no longer need to help those nations, and their booming economies now permit them to buy ever-increasing amounts of American goods. In the same way, our aid to the underdeveloped world, while helping to stimulate industrialization and the creation of a higher standard of living for millions of underprivileged people, can provide a rich new future market for American goods and investments.

Mr. SIMPSON. Mr. President, this year, at long last, I have seen an attempt by a few Senators to express the will and the desires of the American people who are tired of seeing their money wasted

rights bill, his frustration spills over on the foreign aid program. If he believes the administration has pushed too hard in the field of civil rights, a healthy slap at foreign aid may serve to remind the administration of congressional power. In short, the aid program is fair game for attacks from any source for any

reason.

The actions of Congress these past weeks also indicate a growing frustration with the heavy burden of the cold war. The foreign aid burden continues after 15 years-and there is little prospect that it will disappear, because there is little prospect that the cold war will disappear.

Again we are confronted with a strange and disturbing paradox. At the very time we finally appear to be winning the cold war, we seem to be doubting our own strength. At the very time the Communists finally seem to be giving way and pulling back, we also seem to be giving way and pulling back.

The Communists are having trouble with their economy. They are cutting back on their foreign aid program because they do not have the necessary resources. What a great opportunity this provides the United States and the rest of the free world. Now is not the time to retrench. Now is the time to use our own economic resources and the fruits of our $600 billion national income for a great foreign aid offensive. Now is the time for mobilizing all the resources at our command-public and private-yes, above all, bringing into our oversea economic and technical assistance programs the private economy of the United States-we must put to work all private enterprise resources.

Now is the time for faith in ourselves, and confidence that the future belongs to freemen.

As the Soviet Union cuts back on its commitments we should move ahead. Look at the way the Germans are moving ahead all over the world. Some of the largest investments in the underdeveloped world are being made by the Federal Republic of Germany, many of them in some of the most apparently unsettled countries, such as the Congo,

Korea, and Brazil.

The same is true of the French Government, which is expanding its foreign aid program.

Or look at the example of the British, who are preparing to launch an even larger foreign aid program at the very time we are reducing ours. How paradoxical.

It strikes me as just a bit strange that at the very time when our example is beginning to catch hold, we find ourselves talking about cuts. This is like cutting back on production just as the new models begin to catch on, and sales have started booming.

Then, suddenly, a sense of despair seems to grip the mind. Doubts become fears, and hopes are overcome by quesfears, and hopes are overcome by questions. Can foreign aid ever work? Are there any solutions to the problems of development? Would we be better off to abolish the existing foreign aid program and start all over again?

Many are worried, and rightly so, about our balance of payments. But why take it out on foreign aid, which contake it out on foreign aid, which contributes less to the balance-of-payments deficit than the cumulative spending of American tourists overseas, in fact only half as much?

Others are justifiably worried about restrictions placed by other countries on restrictions placed by other countries on American exports. But why make foreign aid the whipping boy when 8 out of every 10 foreign aid dollars are spent on exporting U.S. goods and services?

Why kick foreign aid, when major U.S. industries are benefiting materially from export sales financed by foreign aid dollars-when one-fourth of the exports dollars when one-fourth of the exports of U.S. iron and steel companies, onethird of U.S. fertilizer exports and almost one-fourth of U.S. railroad equipment, for example, are paid for by forment, for example, are paid for by foreign aid?

Some are increasingly concerned, with good reason, about the future of constitutional government in countries struggling toward political democracy. But gling toward political democracy. But why should the foreign aid program as why should the foreign aid program as a whole suffer because of particular problems encountered along the way?

Others are troubled by the climate for American investment overseas and the effect of development in other countries on our own economic strength. But why should foreign aid be blamed for our economic distress and dislocation, or for the state of our international trade?

Foreign aid has its problems, and they must be faced realistically and resolutely. But foreign aid should not become the catharsis for all the ills of the world, nor made the scapegoat for accumulated anxieties.

No undertaking in the history of the human race has posed a greater challenge than the foreign aid program. The wonder is that we have made any progress during the brief time the program has been in operation. It has been alIt has been almost a thousand years since the Magna Carta, and we are still struggling with Carta, and we are still struggling with basic questions of democratic government. Yet scarcely more than 10 years since the launching of one of history's greatest human undertakings there is impatience with its progress.

Unfortunately, foreign aid does not always achieve quick results. If we have

is that the development of less-developed countries requires determination-dogged determination. The way is often The way is often hard. Results are not always readily apparent. Change is stubbornly slow. There are many disappointments and defeats. Mistakes are made. Errors are

in the next 8 years. Unlike the Marshall plan, which rebuilt a damaged but going concern, the Alliance aims to shape a society and an economy that shape a society and an economy that have not existed before."

Impatience is sometimes a virtue, and complacency a sin. But it takes 21 years

mature enough to shoulder individual responsibility, and the Alliance, as the Life editorial says, involves nothing less than the building of a new society and a new economic system. Even in the space age, where time has been compressed beyond belief, it is foolish to expect such a gigantic task to be accomplished overnight. Ten years may seem to us like a long time. But measured by history, and by the time required to change whole societies, 10 years is but a beginning. The Alliance was never meant to be completed in 10 years. It was meant to be well underway within 10 years. Yet there are those who are saying after only 2 years have passed since it was created that the Alliance cannot succeed. Truly it could not succeed if this attitude were to prevail. It is succeeding, and I am convinced that it will succeed, but only if we give it our full and continued support now and in the years ahead.

Arnold Toynbee has said that this age will be remembered not as the atomic age or even as the space age. It will be remembered as the age in which onethird of the human race banded together to help the other two-thirds. Being mortal and finite, being bounded in our understanding and in our perspective, we have difficulty comprehending the historical significance of the momentous events of our day and generation. We act by faith, reason, and conviction, without knowing the consequences. We can see back, but we can only look ahead. We can peer into the future, and try to take the road which leads in the right direction. But we commit an act of faith, in ourselves and in human destiny, whenever we choose one way in preference to another.

There are many who look upon foreign aid as the wrong course to follow. Some look back in sorrow, and some in anger, at the mistakes made in the name of foreign aid in the past. Each of us, I suppose, might run the foreign aid program differently if we were in charge. And each of us wonders, when the roll is called, whether our faith in the foreign aid program, if faith we have, will be justified by the future. We see through a glass darkly. But unless we have faith in ourselves and the future; unless we can translate past success into future action, we will forfeit one of history's greatest opportunities for human good and advancement.

Some day, if we live long enough, we will celebrate the success of the Alliance for Progress and of the entire foreign aid program, just as we celebrate now the great success of the Marshall plan. I hope I am around then, not to say "I told you so," but to celebrate one of the greatest victories in human history. I may allow myself one small pleasure— the pleasure of reading back one of these debates, and comparing what was said with what happened.

We have heard one Senator say here on the floor of the Senate, "If I believe the expenditure of this amount of money would stop the spread of communism, I would support it. But in the light of history, how can any Senator rise on this

floor and say it will stop communism?" We have heard another Senator say that foreign aid "is the road to bankruptcy, and not a very long road at that."

Someday I want to read back over what is being said on this bill. I want to amuse myself, as well as to console myself, just as I have with the statements I have just quoted from the Senate debate on the Marshall plan in 1948. I want to rejoice then, as I do now, that the prophets of doom were wrong, utterly wrong, in predicting such dire consequences for foreign aid; in saying it would never work. The Marshall plan The Marshall plan was a key weapon in the defense of Europe against communism. And rather than bankrupting the United States, the Marshall plan created vast new markets for American business, and now has enabled Europe to join the United States in helping the less developed countries.

The Marshall plan had its legion of critics. But these are always with us. I sometimes wonder how the American Constitution was ever adopted. It passed the New York Convention by only one vote and was ratified by a bare margin in Virginia. How could so many virtuous and intelligent men have been wrong in 1789, and in 1948? History has not treated them kindly. Events have not borne out their fears and misgivings. In the cold light of history they stand convicted of being wrong, however sincere and well motivated they were at the time.

I think it is important for us to bear in mind some of the remarkable improvements which have been made in the foreign aid program during the past 2 years, together with some of the accomplishments which are beginning to be seen. Unlike the Marshall plan, of course, foreign aid to the less developed nations is a much longer, slower process. It has taken more than 10 years to evaluate the success of the Marshall plan, and it will take considerably longer before the results of our assistance to the less developed nations can be appraised. I shall not attempt to recite all of the successes we have gained in recent years. Almost every day there is news of some new achievement. Just the other day I learned about a remarkable example of the progress we are making. In India, which is receiving more American assistance and more assistance from other free world countries than any of the less developed countries, the rate of industrial production increased from 6.4 to 8 percent during the year ending March 1963. Some of the increases in Indian production are particularly amazing. The production of aluminum, for example, increased from 20,000 tons to 43,000 tons, more than doubling during the year. The output of machine tools, an industry so essential for industrial development, expanded by more than 50 percent during the year. The producThe production of nitrogenous fertilizers, without which the Indians cannot achieve vitally needed agricultural output, increased by 40 percent. These startling statistics are one measure, among many, of the strides in the underdeveloped world being made possible by the combination of local initiative and American help.

There are countless other examples of the successes being achieved in the lessdeveloped countries with our help. You could write a shelf full of books on the technical assistance achievements made possible through U.S. aid, or on the advances made in public administration, taxation, and business administration. Countless other examples could be cited in the field of cooperatives, in which I have taken a special interest; in the development of private enterprise through the extension of credit; or in the development of agriculture through a combination of technical assistance and agricultural credit.

Many stories could be told about the great achievements in the fields of health and education. One of the most dramatic of these is the story of malaria eradication. During recent years the number of cases of malaria in the world has been cut from 350 million to less than 100 million. In some countries malaria has been eliminated altogether, freeing millions of people for more productive lives. This is not only a great human achievement. It is a great step toward developing the economic potential of countries burdened with sickness and disease. In several areas of India, for example, the return on money invested in controlling malaria has been about 50 to 1 in increased industrial production, resulting in an increase in the Indian gross national product of some $500 million each year. In one rich region in northern India the elimination of malaria increased the area of cultivated land by 400 percent and the production of food grains by 130 percent.

In terms of overall economic success, a recent analysis of 41 countries which have received more than $300 million in American assistance since the beginning of the program, or, in the case of countries of less than 10 million which have received at least $30 per person, reveals that 33 have achieved substantial economic growth of at least 1.5 percent per capita in increased income per year for the last 5 years. Fourteen of these countries have achieved complete selfsufficiency, while another 11 have reached the point of adequate selfreached the point of adequate selfsufficiency with less than 20 percent of sufficiency with less than 20 percent of their total investment presently being covered by foreign aid. In all 24 of the countries which have achieved both substantial economic growth and adequate stantial economic growth and adequate self-sufficiency, democratic political inself-sufficiency, democratic political institutions have also been strengthened.

Another overall measure of the success of our foreign aid program is the increase in our trade with countries receiving our assistance. U.S. exports to Marshall plan countries more than doubled from 1953 to 1962. Our exports to Japan have more than tripled since

1950. In 32 countries receiving 80 per

cent of U.S. aid between 1957 and 1962,

imports from the United States have increased four times as fast as U.S. economic aid. nomic aid. There are many reasons why foreign aid is in our interest. One of these is the contribution foreign aid makes toward promoting trade. The less-developed world is potentially a vast market for American goods and services. market for American goods and services. Through foreign aid American business

can achieve new opportunities for commercial relations with countries which can become good customers in the future.

the

We all know that besides promoting more and better trade between the lessdeveloped countries and our own, the foreign aid program is also having an increasingly beneficial effect American economy. Eighty percent of all procurement now consists of American goods and services, and much of the remaining 20 percent eventually comes back home. Almost every State in the Union is now beginning to experience the good effects of aid contracts.

In addition to the direct benefit of sales, aid-financed U.S. procurement is also providing the opportunity for U.S. business to gain experience in world trade. Many contracts are being let to businesses which have never before had any experience, or have had very little experience, in selling overseas. Through foreign aid contracts American businessmen are learning the ropes and acquiring the skills necessary for selling through regular commercial channels in the future. As trade replaces aid in the years to come, these skills, techniques and business contacts will prove invaluable in enabling the American businessman to take his rightful place in the world market.

There have also been great improvements in the organization and administration of foreign aid in the last several years. The whole program has been reshaped according to the new directions established by Congress in the Foreign These include Assistance Act of 1961. emphasis on long-term development projects within the framework of general development plans, increased efforts to boost the contributions of other donor nations, emphasis on self-help and reform, and greater concentration selectivity. As the committee report states, there has been considerable progress in these respects. Eighty percent of all U.S. economic assistance is now going to 20 countries. Eighty percent of all military assistance is going to 10 countries.

and

Foreign aid is also becoming more selective as a result of better planning and programing, both by our Government and by recipient governments. For years, one of the greatest weaknesses of the aid program has been the lack of a comprehensive U.S. approach to the problems of a country, as well as the lack of planning by the countries being aided. Until recently, most aid has been given on a project-by-project basis. was very little intensive and systematic analysis of the situation in each country, together with analysis of ways in which the United States could most effectively The procedure now being used by our aid assist with development of the country. officials is a great improvement over the

There

old system. Careful studies are made of each country, and comprehensive plans are set forth to maximize the effectiveness of U.S. assistance. Except where urgent political considerations are involved, aid is given according to development priorities established for each country. Careful studies are made of a country's progress in order to make sure

that U.S. aid is achieving maximum results, and that the country is undertaking satisfactory self-help measures.

We are now also encouraging and helping countries to study their problems and to formulate their own development plans.

In the case of the Alliance for Progress, every Latin American country is required to submit development plans to an expert committee of the Organization of American States for review and recommendation.

Another way in which greater selectivity has recently been introduced into our foreign aid program is through agreements on conditions or requirements which must be met before aid is forthcoming. We labored for many years under the mistaken assumption that such conditions or strings on aid constituted interference in the domestic affairs of other countries, and therefore, were wrong. By contrast, it is now recognized that in order for U.S. assistance to be effective, agreement has to be effective, agreement has to be reached between the United States and the recipient country on conditions which must be met before aid can be made available.

Many of these changes were long overdue, and many others remain to be made. But there has been remarkable progress.

Despite the outcry in Congress, I am convinced that there is substantial support in the electorate for foreign aid.

Support for foreign aid is strong, and growing stronger, in one of the most important groups in American life-American businessmen. A recent study of 1,500 prominent businessmen by the Research Institute of America disclosed that the great majority of American business leaders consider foreign aid essential for promoting a self-supporting and prosperous community of free nations. These findings as reported in the General Electric Forum, were hailed as "revolutionary in their significance"and they are. They signify not only the end of economic and political isolation in the American business community, but also the existence of a new consensus concerning the responsibilities of the United States as the leader of the free world.

RECOMMENDATIONS FOR CHANGES AND IMPROVEMENTS IN THE FOREIGN AID PROGRAM

Before closing, I would like to make several comments about the redirection of the aid program during the next year. The report of the Senate Foreign Relations Committee has already recommended a further concentration of the program and acceleration of the trend toward multilateralizing the aid program. I would like to concur with and to go beyond the committee's comments.

If the discussion in the Senate this year has revealed anything, it has shown that the Congress is not prepared to finance a farflung, multifaced aid program forever in every area of the world. The time has come to make a sharper distinction between some areas of the world and others and to translate this distinction into the machinery of the aid program.

The top priority in our aid program is and should be given to Latin America. The Alliance for Progress program should not be merely one of four regional programs in the same agency. It is different, and on the U.S. end alone entails a wide variety of capital development loans, economic loans, social development loans and grants, and technical assistance. The Alliance program in the U.S. Government should be more independent, should be more autonomous than it now is. Perhaps it should be a separate agency, like the Peace Corps. If this would pose too great a problem of coordination with the State Department, there should be some other steps taken to make the Alliance program autonomous, independent, and

visible.

While a large U.S. lending program will probably continue to be necessary under the Alliance for Progress, more of the capital development lending should be shifted to the Inter-American Bank be shifted to the Inter-American Bank and other international finance institutions.

In other areas of the world, such a multifarious, many-sided program is unnecessary. In the Far East, our military-oriented program should be gradually scaled down, just as our direct involvement in southeast Asia should be gradually curtailed.

In the Near East and parts of Asia like India and Pakistan, multilateral agencies can and should supply much of the capital needed for large-scale development. Increasing the role of the World Bank and IDA in promoting capital to countries like India, Pakistan, Iran, and Turkey can both provide the capital assistance needed and, at the same time, enlist greater participation on the part enlist greater participation on the part of our European allies on economic participation sorely needed.

Our

In Africa we should encourage the Europeans to play the leading role in providing economic assistance. presence can be assured through provision of technical assistance, through the Peace Corps, the food-for-peace program, limited economic aid, and other forms of assistance. The limited capital assistance that we make available for Africa should be channeled, in part, through multilateral agencies, where it will be matched by European funds.

We ought to encourage multilateral, multinational, international banking structures to do more of the financing. We can ask for proper representation on the boards of these banks. We can ask that Americans be included in substantial numbers in the secretariat or the administrative structure, but we have to come to a recognition that direct bilateral arrangement in financing involves us in each country's trouble and is very, very costly. By putting our emphasis upon the multinational organization, we will be able to get the help of others in financing world development. Otherwise, we do most of it ourselves.

GREATER USE OF PRIVATE GROUPS AND OTHER GOVERNMENT AGENCIES

I would like to add one final suggestion for consideration by AID officials. This has come to me in response to remarks I have made upon the Alliance for Prog

ress. The emphasis of the suggestion is that our aid should be channeled toward the building of free groups and private enterprise in the countries aided. To do this requires the mobilization of nongovernmental U.S. and international agencies.

Where the self-help of recipient nations is largely confined to public enterprise, U.S. foreign aid is creating "Frankensteins" which will eventually threaten, rather than contribute to, American security. Every dollar spent in a manner which encourages free groups and institutions is a step toward a world which is in harmony with American interests and ideals. This notion is in accord with Secretary Dean Rusk's demand for an active and affirmative policy of building the social economic and moral strength of independent nations so that they will have the capacity within themselves to throw off the virus of totalitarianism and pursue material objectives in a climate of expanding freedom. It would seem to be in accord with the present administrator's ideas. But what is needed is the practical application of this idea on a sufficient scale to assure its practical significance.

If nongovernment agencies are to be encouraged in countries which receive U.S. aid, this can be done effectively only in one way: by the channeling of U.S. aid to a large extent through nongovernment U.S. and international agencies and by the encouragement of the development and creation of such agencies among the nations receiving aid. This requires the enlistment for the U.S. aid program of a great variety of nongovernmental agencies, ranging from the great foundations such as Ford and Rockefeller to a multitude of small agencies concerned with health, education, community development and many other noneconomic activities. AID has recently made a contract with the National Association of Settlements which will

help to encourage Urban Community Development in Venezuela to assist in community developments among people moving from the country into Caracas. Such contracts on a scale which helps to encourage several hundred of such groups every year in every country which receives aid is the dimension needed to restore U.S. foreign aid to the status it merits and which it needs to survive satisfactorily in the United States of America and abroad.

An approach to foreign aid keyed to such an objective on this scale would provide a substantial leverage effect for foreign aid funds given AID; it would help to mobilize local and international resources on a hitherto undreamed of scale; it would therefore help rapidly to reduce the funds which the United States has to contribute. It would bring about the involvement of the American people which is needed to rekindle their enthusiasm for the great and noble enterprise which American foreign aid has been in the past and can again become. This approach will remove most of the misgivings and create a national atmosphere in which the administration can again count on congressional support for its foreign aid program.