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and private business initiative. He indicates a number of ways in which business firms can take advantage of these opportunities. I think this is an important article for everyone who is interested in foreign trade.

I ask unanimous consent that this article be printed in the RECORD.

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

[From the Journal of Commerce, Mar. 2,

1964]

AGENCIES OFFER AID: DEVELOPING NATIONS EAGER FOR U.S. INVESTORS

(By Robert S. Robin) (Part I)

Right now many of you, American businesses of all sizes-small, medium and largeare in the process of establishing numerous types of operations in many of the emerging nations of Asia, Africa, the Middle East and Latin America. These developing nations throughout the world are anxious to encourage your investment in almost every line of business. In many cases, there is a great welcome, and concessions are granted for investments in almost any amount, large or small, to encourage economic development.

The business world of emerging nations is open, and every day more and more small and medium-sized American companies are seriously considering the market expansion, the high rate of return and the preservation of existing markets offered by investment therein.

AGENCIES ANXIOUS

Various agencies of the U.S. Government are also anxious to have you bring your American businesses to emerging nations. The Development, Finance and Private Enterprise section of the U.S. Agency for International Development, the Department of Commerce, the Export-Import Bank, and other international agencies collectively are able to provide you with debt funds and several types of grants and guarantees issuable under programs to encourage you to invest overseas.

While, as with many governmental efforts, there is considerable pro and con as to the efficacy of the programs and the agencies involved, there is no doubt that the aids available are worth your investigation. As to the merits of available governmental help, it is the writer's opinion that the programs offered to you are very good in theory, but perhaps not as good in theory or practice as they could be made.

Whether you are large or small, experienced or inexperienced in foreign operations, you probably have three principal questions in connection with potential investment in emerging nations:

THREE QUESTIONS

I. What will it cost me to find out if I want to go into business there?

II. How much money will I have to put up to get into business?

III. Will I get my money back:

(1) if the foreign government refuses to let me convert my profits into dollars?

(2) if I get my profits converted into dollars but I am unable to take my dollars out? (3) if my plant is confiscated? (4) if there is war or revolution?

As practical businessmen, be advised that the U.S. Agency for International Development is prepared under certain circumstances to share the cost of a survey trip with you and your company to examine an investment possibility in an emerging nation. In the event you make the trip, and if you (not the Government) determine that you will not invest, and you submit a survey report to the

Agency for International Development, that Agency, under a survey grant issued to you for your particular foreign investment possibility, will pay up to one-half of the cost of the survey trip (including air fares, hotels, meals, portions of salaries of regular employees, and consultants' fees and expenses). The details of the survey grant program will be covered in part II of the series.

EQUITY INVESTMENT

Be advised also that your equity investment in the foreign operation may be in the range of 30 to 50 percent of the total project cost; that your equity can consist of many items other than cash; and that long term unsecured unguaranteed debt money can be obtained under some circumstances for as low as 54 percent (to be covered in part III of the series).

This is all well and good, you can take a look at an investment possibility cheaply, and get into a business yielding what some have described as an astonishingly high rate of return with minimum equity. However, in our experience, your most serious question is what will happen to your investment and your high profits if there is some change in the government of an emerging nation, or some other event causes an expropriation, or a restriction upon conversion or repatriation of funds, or a policy of "creeping expropriation" begins. These events can eat away your profits, limit your power to convert your profits into dollars and take them out, or result in the complete takeover of your plant.

Fortunately, our Government has thought of these problems, too. It has entered into treaties with many of these emerging nations, which, within limits, will guarantee the payment of certain compensations in the event of expropriation, restriction on conversion and repatriation of funds, or losses caused by war or rebellion. Our Government has also gone a step further. You, the American company, can buy what in effect amounts to an insurance policy, whichagain, within limits-pays you a portion of certain losses in case events occur which are prohibited by the treaties.

INSURANCE POLICY

The coverage of the insurance policy-the investment guarantees-is considerable, justifying the effort necessary to get it. This includes: (1) gaining approval of the foreign government for the inclusion of the project within the treaty between the "host country" and the United States; and (2) country" and the United States; and (2) applying for issuance of the guarantees from the Investment Guarantees Division of the Agency for International Development.

For a cost of one-half of 1 percent of the in-force amount of each coverage, plus a charge of one-fourth of 1 percent on the difference between the in-force coverage and a maximum you specify, you can buy the following guarantees:

(1) Convertibility guarantees covering up to 200 percent of the dollar amount (or dollar value) of the equity component of the investment. In special cases, an even greater percentage of protection will be afforded. Loan investments from all sources can be guaranteed up to the amount of the loans (stated in dollars) plus total interest.

EXPROPRIATION

(2) The expropriation guarantee can, for the equity component of the investment, cover the amount originally invested. For the loan component of the investment, an expropriation guarantee can cover the total dollar amount or the dollar value of the principal amount (if the loan was in local currency) plus the dollar amount (or the dollar value) of all interest payments.

(3) The war risk guarantee covers 90 percent of the value of the physical property of cent of the value of the physical property of the foreign enterprise destroyed in the event of war or rebellion.

However, these guarantees do not go as far as they should, and the American businessman building a plant in a less-developed country should not be deluded into thinking that all is "all right" simply because he has the standard investment guarantees covering his investment.

You made the investment to make profits, but the investment guarantee does not cover losses of those future profits you expected to make.

You made your investment expecting to convert your profits to dollars, but your losses caused by a revaluation of currency, changing the rate of exchange from, say, 5 units of local currency to the dollar to 10 units to the dollar, are not covered by the standard guarantees.

ESCAPE CLAUSES

Likewise, treaty "escape clauses" enabling the host country to refuse repatriation of funds if the foreign exchange required to effect such repatriation is necessary for "national purposes" are not eliminated; and there are numerous other areas of a technical nature having high possible dollar loss consequences that are not covered.

What can be done about these holes in the guarantee coverage? Sometimes, nothing can be done, but sometimes, depending upon negotiation strengths, most of the hidden problems can be eliminated. Of course, each investment stands on its own two feet as far as negotiations are concerned, but in general, we have found that it is possible for an American company investing in an emerging country to negotiate and execute what amounts to a private treaty between it and the host government and to attempt to include within this agreement the whole catalog of protections which are not present in the standard treaty.

PRIVATE AGREEMENT

Of course, this private treaty-type agreement by itself generally means little unless the breach of each and every item in it is insured against by our Government and the terms of payment of the "insurance policy" and the evidence required to prove the loss are also specified. If all you have is this treaty, the breach of it usually allows for "fair" access to the courts of the country that, for instance, just expropriated your plant, and from there, to other arenas of appeal, thus converting your expected profits to deductible lawyers' fees. To avoid this, or to minimize the possibility of its occurrence the two-step extra protection process should if possible, be used:

(1) Negotiate and execute an agreement between the U.S. business-investor and the host country, and seek to include in the agreement the complete investment protection package plus all aspects of the tax, duty, and other concessions granted by the host country.

(2) Have this agreement approved so that loss caused by the breach of any term of it will be made good under the investment guarantee program if you are not paid by the host country.

TWO-STEP MECHANISM

It must be emphasized that this two-step mechanism to achieve greater protections does not work in every case, and although some preliminary indications can be obtained prior to the first feasibility study, there is no definitive method of determining whether a government will execute such an agreement other than actually sitting down with the several ministers in their country and negotiating.

Although our Government has gone quite far in the coverage of its investment guarantees and in securing the treaties upon which they are based, it is still up to each American business investing overseas to do the best he can for himself, which after all, is what private enterprise is all about.

[From the Journal of Commerce, Mar. 2, 1964]

SURVEY GRANT NOTED: AID OFFERS BAIT FOR INTERESTED INVESTORS

(Part II)

The basic encouragement to take a team out to an emerging nation to determine if it is feasible for you to make an investment there is offered by the U.S. Agency for International Development (State Department). Following proper application, AID will, under certain circumstances, issue a so-called survey grant to you. Under this survey grant, if you (and not the government) decide, after the survey, that you will not invest and you submit a survey report to the Agency for International Development, it will pay up to one-half of the cost of your trip.

GRANT PAYMENTS SCOPE

Under the grant program, the agency can commit itself to pay up to one-half of the following items:

(1) Transportation costs to and from the host country for all members of your survey team;

(2) Transportation costs within the emerging nation;

(3) Reasonable per diem allowances for your team (hotels, meals, etc.) in an amount thought to be reasonable depending upon where you're going (e.g., up to $30 per day per man in southeast Asia);

(4) Allocable portions of the salaries of regular employees of your company who make the survey (usually based upon that portion of the annual compensation of the employee paid while he is on the trip);

(5) Compensation of outside professional consultants for the survey;

(6) Similar reasonable per diem expense allowances and transportation costs for your professional consultants;

(7) Compensation of local consultants (such as real estate appraisers) hired in the host country;

(8) Costs incurred in looking for local joint-venture partners, if you are interested in a joint venture; and

(9) Miscellaneous items, such as shipping costs of necessary equipment needed to conduct the survey, insurance, etc.

PROCEDURE OUTLINED

The survey grant is obtainable by filing an appropriate application with the Development, Finance, and Private Enterprise Section of the Agency for International Development. So far, there is no prescribed form, but a series of broad topics must be covered in your application, including a description of the proposed investment, the scope and cost of the survey, the proposed plans for the implementation of the projected investment, the ability of your company to finance the investment opportunity to be surveyed and, finally, the relationship of the investment to the overall economy and development program of the host country.

How long will it take you to "move" the Government? This depends, naturally, on a number of factors, the most important being whether, initially you gave the Agency all the information it needed. (Almost invariably the Agency will request additional information.)

ROUTING SHIFTED

Quite recently, the Agency has shifted its internal routing of these applications and now, they are said to be passed upon by one section rather than being farmed out to the various departments or desks to which the particular host country for your potential investment has been assigned. Speedier service may be one result of this centralization of the approval function. However, it should be said that under the old system, approvals have been issued after the filing of a very complete application, within 1 to 6 months or more.

What are the standards of approval? The controlling statute, as you can expect, speaks in the very broad terms of encouraging and promoting "the undertaking by private enterprise of surveys of extraction opportunities." The Agency, as you also might have expected, has superimposed its own standards in terms too broad to warrant their quotation. However, the Agency, as a general matter of operation, will hear any legitimate proposal, and, as a general rule, will be

direct and frank in their conversation.

JUNKETS OUT

As is the case under the investment guarantee program, some custom building of the survey grant documents themselves may be required to enable a practical working program for your potential foreign investment. For example, the Agency will not finance a sales junket, and accordingly, in the grant documents, they provide that any investment on any stopover, or any sales to the host country within 3 years will be considered an "investment"; all with the result that you will not be reimbursed or will have to return the reimbursement, with interest, if either event occurs. Of course, if you're presently exporting to the "host country" or to a "stopover country," this means, within the standard document, that you've already "invested" and can't be reimbursed. Thus, this problem must be spotted and solved and, as you can expect, there are ofttimes other special facts in each case which suggest special provisions.

A word about the cost of the survey and some thoughts on how to conduct it. If you make the investment, the survey cost is your responsibility, but it can be capitalized and counted toward making up your equity investment, thus giving you additional debt leverage. However, under the survey grant program, the Agency stands ready to pay half your cost, and this gives them an interest in the cost of your survey. Sometimes we see surveys that cost so little that both you and we know what will come out of them. On the other hand, our experience suggests that, if you're really serious, it's better for you to avoid, at all costs, the simple, leisurely, technical-only sojourn. Instead, if you can, plan a shorter trip, but with a no-nonsense dawn-to-midnight working team consisting of, at least, one decisionmaking top executive, and the whole complement of talents necessary to structure your investment properly from the beginning. Your host government will generally do more for you because the caliber of your team underscores your seriousness. Your own Government, on the other hand, may initially balk at the costs necessary to operate a decisionmaking survey which will quickly move the investment possibility to reality, but generally speaking, it will be allowed under certain circumstances. Despite the relatively insignificant initial problems of this approach, we have found that this kind of an investment survey works most efficiently, and the psychological effect on the host government of your team so structured, can show that your company personifies the traditional best of efficient American business and can, most importantly, aid the host government's decision that it wants you and your company in the host country as desirable industry builders, and will thus encourage the officials of the host government to do all they can for you.

[From the Journal of Commerce,
Mar. 2, 1964]

FOREIGN VENTURE MONEY PROBLEMS, CURES
OUTLINED

(Part III)

In this part, we will discuss the typical problems of actual investments in any of the many emerging nations of Asia, Africa, the

Middle East and Latin America; and thereby attempt to answer your question:

"How much money do you need and where are you going to get it?"

First of all, let's dispense with the obvious: some of the money is going to have to be yours. How much equity you're going to be responsible for depends broadly upon (1) where you look for the debt component of your investment, and (2) what the debt money is going to be used for. Since each investment, of course, stands on its own two feet, generalizations are only a rough guide. However, it can be said that investments of standard manufacturing type (as opposed to such projects as steel mills, roads, power companies and banks) have been made, ultimately, with as high as a 3-to-1 or 4-to-1 debt-to-equity ratio. Further, if you are willing to accept a first-class local partner (more on this later) your equity, while still maintaining control, can be as low as 15 percent of the total project cost.

LOAN BASIS VARIES

It must be emphasized that these figures are general and are composites, in that loans for some purposes from some sources in some circumstances are acquired on a 3-to-1 ratio, whereas other loans require only a 5 percent cash on delivery (not downpayment) as the required equity. In either event, security and a guarantee by your company can be the rarity.

Where do you borrow funds? Rather than simply enumerating the complete list of available international lending agencies, the funds of some of which are available only in certain areas and for certain purposes, it is better practice to concentrate instead on how funds available from several sources can be put together to enable a possibility to become a solid profit-producing operation.

First, divide your total project cost between local currency of the host country and U.S. dollars or other hard currencies, and second, put a debt package together. For example, a certain portion of any investment project can be bought with the currency of the country you're in; for example, land, certain construction materials (such as concrete) various types of acceptable locally manufactured machinery and acceptable locally available raw materials. Of course, your local cost for construction and first year's operation (part of project cost) are items you will pay for in local currency. It is advantageous to you in your negotiations with the host government, by the way, to offer to acquire as much as you can locally, thus limiting the country's foreign exchange requirement for your investment and maximizing the considerable foreign exchange savings generated by your investment-a most crucial point. After you have allocated as much as is acceptable to you to the category of local currency requirements, you can look to various sources which will loan currency to you.

LOANS FLEXIBLE

A U.S. source for the local currency debt component requirement of your investment is the so-called Cooley loan administered by the Agency for International Development Al(State Department) in Washington. though the source of these loanable funds are proceeds of the sale of U.S. agricultural commodities, the loan to you is not limited to agricultural purposes. You can use the local currency for land acquisition, building costs, working capital, inventory, installment sales, refinancing, payrolls, etc. However, Cooley loans cannot be made for the manufacture of products which would be exported to the United States in competition with U.S.-made goods, and they may not be made for the production of items marketed in competition with U.S. agricultural commodities. Interest is usually charged at the local rate charged by local development banks (e.g. 72 percent currently in Pakistan and

8 to 9 percent in Thailand) and the maturities are related to the purpose of the loan, but are usually not in excess of 10 years. The loans are repayable in local currency, and there is no maintenance-of-value requirement.

The application for a Cooley loan is somewhat extensive, and the equity base (local currency or dollar equivalent) for the loan, as in dealing with a private bank, is a bit negotiable. *** Cooley loans are usually available in most of the emerging nations, but a check should certainly be made in advance.

Another source of the local currency debt component of the project, and somewhat less restricted in terms of purpose are the local development banks, which are established in most of the emerging nations. These local development banks, themselves often financed by various agencies, are an excellent source of local currency debt capital, and for that matter, hard currency, including dollars. The term and interest rate again depends upon the purpose of the loan and other factors, but generally, rates are reported to run from 7 to 10 percent for about 10 years. Sometimes, the host government and, ofttimes the local development bank, (whose managing director often sits on the national permissions board, or similar committee in your host country) would like to see the local currency requirement made up by local equity contributors, but they are aware of the desires of many of you for absolute majority ownership and the fact there will be a large foreign exchange requirement for your project.

EMERGING NATIONS

The establishment of projects in emerging nations generally requires more capital goods than are available and acceptable in your host country. Therefore, much of the funds you will require will be in hard currencies to pay for these capital goods available only for hard currency countries, such as the United States, Germany, Italy, Japan, France, and others. The hard currency debt component of your investment is, under certain circumstances, easily tied to these capital goods, and many sources of hard currency debt money are available, some on a very thin equity matching basis.

For the U.S.-produced machinery, equip ment, and installation services, 90-percent debt financing (through a guarantee program) is available through the Export-Import Bank of Washington, D.C. Several programs are available ranging from direct financing-project credits to new forms of medium term financing based on the old Exporter Credit program. Under the old, but still basic, Medium Term Exporter Credit program of Eximbank, guarantees are issuable and/or assignable to your exporter's bank to cover their exposure when they finance medium-term exports without recourse to the exporter.

Additionally, lines of credit for U.S.-produced raw materials may be obtained, and if your project is a very large one, direct dollar long-term loans are sometimes available, and at times, at a cost of 54-percent interest.

For hard currencies of other countries used to pay for equipment and machinery you might decide to buy in, say, France and Germany, Italy, etc., such hard currencies are available through the Local Development Banks which administer funds of these countries as well as World Bank credits

relatively small equity investment on your part.

Your equity investments can even be made smaller if you decide to accept a local minority partner. In many emerging nations of the world, you will find first-class industrialists who would like nothing better than to become your partner, and although there are problems in choosing the right partner at the right time, we have found the results of a carefully selected local partner so gratifying that, in many cases, whether or not equity is a consideration, we will recommend that this possibility be seriously considered. What we have tried to develop in this series of articles is no more than an outline of the very practical encouragements to you to invest in emerging nations abroad. We have not covered at all the numerous concessions in terms of taxes, local grants, dutyfree imports, protective tariffs, etc., obtainable in some cases in many emerging nations of the world. Additionally, there are remarkable (and as we have seen, depending upon proper negotiation, guaranteeable) profits to be garnered. Of course, there are benefits to your host country as well. Many American companies, of all sizes have begun to realize that possible adverse tariff probto realize that possible adverse tariff problems could seriously minimize their export markets, and that now is the time to guarantee markets (sometimes on an exclusive basis) to serve the expanding populations of the world's emerging nations. Every year, the parade of businesses investing overseas grows longer, but now, there is still room in the front platoon.

for granted that a war on poverty meant taking money from the "haves" and turning it over to the "have-nots." For until recently it was always assumed that there was only so much pie and the social question was how to divide it.

But in this generation, one might say in the past 30 years, a revolutionary idea has taken hold in the advanced countries of the world. The size of the pie to be divided can be increased by invention, organization, capital investment, and fiscal policy, and then a whole society, not just one part of it, will grow richer.

This revolutionary idea, which has been discovered, tested, and demonstrated in this century, is at work in every industrial society regardless of its basic doctrine and ideology. It is transforming not only capitalism as it was known a generation ago, but it is transforming also socialism and communism as well. The Socialist Parties of Western Europe, for example, have abandoned the Marxist conception of the class struggle, and there is every reason to think that in the Soviet Union the Marxist-Leninism is giving way to the modern idea of an affluent welfare state. And although the less developed countries are as yet unable to apply the idea, it is recognized by the leaders of all the more enlightened ones.

The Kennedy-Johnson campaign against poverty operates in this historical context. The basic assumption is that the American economy can readily produce the means to reduce poverty-which was estimated as the lot of one-third of the Nation when Franklin Roosevelt took office and is now down to onefifth. The real problem is to analyze correct

WAR ON POVERTY IS WAR FOR ly the causes of the poverty that remains and

ALL AMERICANS

Mr. PROXMIRE. Mr. President, in today's issue of the Washington Post Walter Lippmann, as he so often does, has mixed great wisdom with idealism, and has pointed out something which I think has escaped too many Members of Congress; namely, that the proposed war on poverty program of the administration could succeed this year as it could tion could succeed this year as it could never succeed before. We must recognize above all, this is a program which could benefit all Americans. It is not a question of taking away from the "haves” and giving to the "have-nots.'

As Walter Lippmann has so well said, every American stands to gain by the program.

The real drag on our economy, and the reason for a great deal of our heavy taxes, is that many Americans are poverty stricken and have not had an opportunity to become productive and to become taxpaying citizens, as they would like to be. The war on poverty must be recognized, if it is to succeed, as something that can help every single American, including those who are well to do; middle-class Americans, as well as those who are poverty stricken.

Mr. President, I ask unanimous consent that the column entitled "The War on Poverty" by Walter Lippmann, to which I referred, be printed in the RECORD.

There being no objection, the article which enable the purchase of goods from was ordered to be printed in the RECORD, practically any country.

It is, of course, impossible to set out all governmental and quasi-governmental sources of debt funds, but it can be seen that what you have to do is develop a package of debt money from many sources specifically planned for your particular project. This type of eclectic planning will enable a

as follows:

THE WAR ON POVERTY

(By Walter Lippmann)

The world does move, and there is no better proof of it than this war on poverty which which President Kennedy designed and President Johnson has begun to wage. generation ago it would have been taken

to learn by experimenting how to reduce those causes.

The official foundation of the "war" is chapter 2 of the "Annual Report of the Council of Economic Advisers" which was transmitted to the Congress in January last.

The first question, of course, is to define what is meant by poverty. The answer is bound to be some kind of rough statistical standard. But as nobody is proposing to use these figures to hand out money to individuals, an estimate of average need for an average family will do for an understanding of the size of the problem. The official measure which has been adopted is to regard as poor a family of four whose total income from all sources is less than $3,000 a year.

This is not enough money to maintain a decent standard of living for the family. If the family spends 70 cents a day per person, it will spend a little over $1,000 a year on food. That leaves $2,000. It is estimated that $800 will be needed for housing-rent or mortgage payments, utilities, and heat. This leaves $1,200. That is less than $25 a week for the whole family for everything else for clothing, transportation, recreation, medical care, insurance.

Though $3,000 a year would be affluence in a village in India, it is harsh poverty in the United States.

There are 47 million families in the United States, and at least 9 million of these families-nearly one-fifth of them, consisting of 30 million persons-are poor. The figures make the real situation look better than it is. There are contained in the 9 million families over 5 million, consisting of more than 17 million persons, who have a total income per family of less than $2,000. There are also the lonely individuals—more than 5 million of them with incomes of less than $1,500 a year.

The next step is to investigate the reasons why these 9 million families are poor. The modern studies of poverty have demonstrated-I think beyond dispute-that the greatest of all causes of poverty is a lack of education. The next greatest cause is discrimination, which makes a nonwhite family two and a half times as likely to be poor

as a white family. Another great cause of poverty is poor health. Another is the absence of a full-time wage earner, due to the age of the parents or to the fact that the family is broken.

These being the main causes of poverty, it is evident that it is possible to reduce themgranting that they cannot all be eliminatedby improving the schools and the public health facilities, by combating racial discrimination and, where necessary, by public relief. It can be said that all of the poor are not deserving poor, which can also be said of at least as many of the nonpoor. But it cannot be argued that all the children who are condemned to go to our worst schools are receiving all the education they are capable of absorbing. The truth is that we ought to spend more on the schools in neighborhoods where the families are very poor because the schools must play a major role in overcoming the handicaps of living in a congested slum.

There is no reason to doubt that, if we take the measures to counteract the causes of poverty, we shall in some degree reduce it. The effort will pay off well not only for the poor but for all of us. For there is nothing so good for a nation as to become interested in doing good works.

THE FOREIGN AID PROGRAM

Mr. AIKEN. Mr. President, recently I received a letter from David W. Howe, publisher of the Burlington Free Press, Burlington, Vt. Mr. Howe is now traveling outside the country. In the letter Mr. Howe expresses his view on our foreign aid program. Since his views represent the views of a considerable number of people in this country-apparently a growing number-and since he has given me permission to use his letter in any way I see fit, I ask unanimous consent to have it printed in the RECORD. There being no objection, the letter was ordered to be printed in the RECORD, as follows:

BEIRUT, LEBANON, March 11, 1964.

Senator GEORGE D. AIKEN,
Washington, D.C.

DEAR SENATOR AIKEN: This is, I believe, the first letter to you from me in 2 years or so. It may be too long, but it embodies over 12 years of investigation and thinking about our foreign aid policies and activities. During this time I have visited about 55 countries, 5 other continents, had over 35 talks in foreign countries with U.S. Embassy officials and over 65 talks with AP and UP men. These were easy conversational talks on their countries' situation. My inquiries have been of the present, the fairly recent past, and sometimes of the probable future.

I continue to be a Vermonter who is a firm believer in the Calvin Coolidge type of economy. During Coolidge's leadership I believe our country possessed a great future, greater than today.

Your work on our Foreign Affairs Committee has led you to investigation of many countries. In Lisbon last year, a Dutch attorney told me of your detailed and thorough interest in Portugal's African colonies. I know you have been studying widely and thinking deeply on these subjects.

It is my present hope that you and Mr. PASSMAN of the House will combine forces to cease this aimless, costly use of our dwindling gold supply.

What are some of the factors?

We are discussing the $80 billion and more

poured out since the end of the Marshall plan. The repair of war damage was a worthwhile contribution, and built up some healthy competitors. (There were two especially silly noncombatant countries

that participated soon after under the direction of exceptionally fine Vermonters, but that was just the beginning of a terrific pouring out of the Nation's billions.)

Let

us say that Korean and Taipei expenditures

can probably be justified.

The giving of a red cent to Sukarno in Indonesia is totally indefensible. There we have learned how to buy a billion dollars' worth of trouble for a hundred million. Do

nations of $3 billion to Pakistan and much more than that to a slipping, poorly conducted Socialist country like India, cannot be defended nor even explained.

To digress for one moment: one of the most seasoned AP men in the Far East tells me that present sources will sweep into China's Communist hands all of southeastern Asia, up to east Pakistan in the next 10 years. This is purely an aside.

Our foreign aid money since the Marshall plan has been 60 to 80 percent wasteful. It could be the factor which will require cutting the gold content of the dollar with all

that entails.

The American voters will some day get this story in terms that many understand. The reactions will be beyond present imaginings or predictions.

A very large share of the military equipment put out under foreign aid will do damage to the recipients or their neighbors, and will not aid peace or stability.

This foreign-aid expense has none who defend it with understanding. Emotional or pseudophilosophical grounds, or empty hopes, or the pleading of the staff of over 20,000 are the sole justification.

There have been about 100 countries receiving this money in the last dozen years. A recording of the uses and results would give anyone indigestion. There are a couple of thousand American manufacturers and other businesses who have been beneficiaries, and they are noticeably silent. Their eyebrows tell something. In the 100 countries, all who are supposed to benefit from the giveaways feel contempt, if nothing worse, for the United States. Who will say that we have failed to be liberal in buying enemies?

The whole subject is too vast to present except in theory. The theory is not defensible.

The World Bank is a source of great pride. May it continue its remarkable record.

The Truman plan was good, if duly constituted executive or legislative officers asked for it in detail and in writing, in the case of their own country's needs.

I have summarized some years of study, observation, and thinking on this subject. You are at liberty to circulate or publish this letter in any way that you may wish. Sincerely yours,

DAVID W. HOWE.

NATIONAL WILDLIFE WEEK Mr. HUMPHREY. Mr. President, 27 years ago President Franklin D. Roosevelt first proclaimed an appropriate week to be observed as National Wildlife Week. One week of appreciation for wildlife as one of our basic and valuable natural resources has been observed each year since that time. The National Wildlife Federation is to be commended for its sponsorship of this annual observance which has come to mean so much to conservationists and all people throughout the Nation. Our attention is called to the fact that this is National Wildlife Week.

The observance this year, in many respects, has greater significance than ever before. The Congress can take pride in having had a part in making this so. We also are obligated, it seems to me, to pause and take notice as to what has

been accomplished and to determine what more we must do in order that our Nation's land, water, and related wildlife resources may be protected, conserved, and managed to meet the needs of all the people.

We know that provision of bountiful wildlife populations constitutes one of the greatest sources for good wholesome recreation. We know that our citizens in ever-increasing numbers with more

free time on their hands want and need increased recreational opportunity. This is a part of our country's overall needs for outdoor recreation resources and opportunities.

Traditionally, outdoor pursuits have been an important part of the wholesome American life. They have contributed to good citizenship, our economy and our democratic form of government. Due to the pressure of human use on our natural environment, including millions of acres of our landscape going to residential sites, shopping centers, highways, airstrips, industrial plants and all the other needs of an increasingly urbanized and industrial nation, we must do more than ever before to assure adequate opportunity for all to enjoy the great out of doors. Conservation and wise use of land, water and related resources which can be planned and managed for various forms port of the Congress. of outdoor recreation needs the full sup

During the past 15 years or more the growing public demand for use of the outdoors, resulting in increased competition for recreation resources, gave the Congress and the Nation concern. In 1958 the 84th Congress recognized a need for a nationwide study of these problems when it established the Outdoor Recreation Resources Review Com

mission. That Commission was directed to survey the outdoor recreation needs of the American people over the next 40 years and to recommend actions to meet those needs.

In its report to the late President Kennedy and to the Congress, that bipartisan Commission, headed by Laurance Rockefeller, made a historic report that has created universal interest and enthusiastic support. That report said in part:

Leisure is the blessing and could be the curse of a progressive, successful civilization. Most Americans face the prospect of more leisure time in the future, and thus the

challenge of using it for their enrichment.

Being in the outdoors is a good, wholesome, healthful use of leisure.

The fact that we live in a world that moves crisis by crisis does not make a growing interest in outdoor activities frivolous, or ample provision for them unworthy of the Nation's concern.

Eight Members of the Congress, 4 from each party from both the House of Representatives and the Senate, along with 7 private citizens serving on that Commission, made more than 50 basic recommendations to assure that the benefits of outdoor recreation would be available to all Americans, now and in the future. Certain of these required quick consideration and action. As a result, the Congress has enacted legislation creating the Bureau of Outdoor

Recreation; it passed the Food and Agriculture Act of 1962 providing the consideration of recreation as a desirable use of farm and other rural lands; provided for loans and cost-sharing for wildlife and recreation practices and enterprises; authorized new national recreation areas to be administered by the national park system; extended the open spaces program for the good of metropolitan areas; and appropriated funds for other recreational purposes. A good start has been made, but more legislation is needed.

I call to the attention of the Senate an almost phenomenal accomplishment of a small but stalwart segment of America in providing recreational opportunity to more and more people of our cities and towns across the country. I speak of the farmers and other land

owners.

Through the nearly 3,000 soil and water conservation districts organized under State law and governed by an elected body of five landowners in each district who serve without pay, some 17,000 outdoor recreation enterprises have been established on farms, ranches, woodlands, and other land units. Most of these privately owned and operated enterprises are sources of added income to the landowner and operator. These

well distributed throughout the country's local soil conservation districts which cover more than 95 percent of this Nation's farm and ranch land. These enterprises include vacation farms and dude ranches, campsites, nature trails and wildlife sanctuaries, picnicking, outdoor sports centers and play areas, natural hunting areas with improved wildlife habitat and similar conservation measures, fishing waters managed for improved fishing, shooting preserves where pen-raised game is released for the enjoyment of the hunter, water based recreation areas for boating, water skiing and related activities, and the development of cabin and cottage sites for lease or sale to urban people. In this era of ever-increasing technology in which Americans are capable of producing more of almost everything, including certain farm commodities, I submit that those rural recreational enterprises are excellent use of our land, water and related resources.

These accomplishments could not possibly have been achieved without expert technical assistance to those landowners. That assistance has been made available, for the most part, by the Soil Conservation Service of the U.S. Department of Agriculture. I emphasize, however, that this has been done without any increase in appropriations to that agency for furnishing such technical assistance to those districts. New districts are being organized in a few States and need staffing with qualified technical personnel to help wise use of natural resources including recreation. Many districts have updated their programs of work to include recreation as an alternative use of the land. This is in accordance with the memorandum they have with the Secretary of Agriculture. A definitive study of the land and water resources of the United States made by

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the Department of Agriculture shows that this Nation has 51 million acres of land in crops which should be converted to other uses. Much of that land could be put to good use in meeting the needs of city people. Converted to incomeproducing recreation enterprises, it can supplement the sagging income of farm families, thereby meeting a dual national need. The key to putting unneeded agricultural land to economic use-and I firmly believe that should be our national goal rather than to pay farmers to let it lay idle is adequate technical assistance. This is more especially true in the case of income-producing recreational use which is new to most rural landowners.

Mr. President, I urge each Member of Congress to give this matter of adequate Congress to give this matter of adequate Soil Conservation Service technical assistance and benefit payments for wildlife and recreation conservation practices through the Agricultural Conservatices through the Agricultural Conservation and Stabilization Service earnest consideration as we observe this National Wildlife Week. In doing so we should remember that between 75 and 80 percent of all fish and game are produced on the private farm and woodlands of the country. This supplies, and must continue to supply, a great portion of our total outdoor recreational needs.

MCCLOSKEY'S STORY

Mr. WILLIAMS of Delaware. Mr. President, in the March 18 issue of the Wall Street Journal there appeared a most interesting article entitled "McCloskey's Story." Closkey's Story." The article points out how Mr. McCloskey, the big fundraiser for the Democratic Party, prospered under several large contracts which were awarded on a negotiated basis, rather than on competitive bids.

As the article points out, in many instances the ultimate cost to the Government was substantially over the original contract price. To make matters worse, in several instances the construction in several instances the construction work has proven to be unsatisfactory. As an example, I cite the faulty work in As an example, I cite the faulty work in the construction of the Veterans' Hospital in Boston, which has resulted in a pital in Boston, which has resulted in a $4,918,577 damage suit by the Government-CONGRESSIONAL RECORD, pages 902903, January 22, 1964.

This article, as appearing in the Wall Street Journal of March 18, pointing out Street Journal of March 18, pointing out the manner in which the administration has favored this big fundraiser for the Democratic Party, should be read by all taxpayers; and I ask unanimous consent that it be printed at this point in sent that it be printed at this point in the RECORD.

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

MCCLOSKEY'S STORY-HOW BIG FUNDRAISER

FOR DEMOCRATIC PARTY PROSPERED AS A BUILDER-HE WINS NEGOTIATED CONTRACT ON CIA PROJECT; STADIUM JOB FIGURES IN BAKER PROBE-PRAISE FROM MATT'S CLIENTS

(By Monroe W. Karmin) WASHINGTON.-A fascinating building tucked away in the southeast sector of this

growing Capital is, to the esthetic eye, typical of much local architecture-white, cold, uninspired. Its appeal lies not in its beauty uninspired. Its appeal lies not in its beauty but in its mystery.

Chain link fencing bars the unwanted; windows of brownish glass brick prohibit penetrating vision; and Government officialdom shuns discussion of the project. It's "classified."

The man whose company recently completed this secret structure appears to be of opposite design. To many a visitor, Matthew H. McCloskey, Jr., personifies grand Gaelic charm-rosy, warm, witty. Fittingly, he represents this country in Ireland as Ambassador. And as this career draws to a close, master contractor, he's earned millions Matt McCloskey resumes two others. As a building public works; as a master politician, he's collected millions for the Democratic Party. Nevertheless, he too is most intriguing in his mystery. Much about Mr. McCloskey is hidden from view.

Like that project in Southeast Washingin the United States for a holiday, won't talk ton, the Ambassador, who has been back about it. Nor will son Tom, president of the family company in Philadelphia. Nor is much enlightenment offered by the General Services Administration, which negotiated the construction contract. Only persistence elicits the bare information that McCloskey year of the Kennedy administration—and & Co. got the job in November 1961-the first that construction was completed recently on schedule.

John E. Byrne, the agency's information officer, explains that competitive bidding was skipped because of the classified nature of the facility and the critical time element involved. He says GSA experts considered five contractors with building experience in Washington, decided on Mr. McCloskey "because of his reputation to be able to do a job of this type (altering and reconstructing an existing building shell) within the time framework," offered it to him personally, and "that was it.”

ready to devote attention to his private busiAt the time, Mr. McCloskey was quite ness. As national treasurer of the Democratic Party, he had been occupied with the chore of wiping out the multimillion-dollar deficit run up by President Kennedy's 1960 campaign, as managed by brother Bobby. Mr. Byrne is quick to assure that "the recomfrom our professional staff and there was no mendation to do this particular job came politics involved."

SEARCH FOR SIMILAR CASES

"very unusual." The contract wasn't even Still, Mr. Byrne describes the procedure as discussed with the four other builders considered capable, he says. He can't recall a previous occasion when competitive bidding was eschewed on a major Washington project; certainly not since the McCloskey award, nor during the decade before. Searching for cases even remotely comparable, Mr. Byrne requires weeks to discover the $9.7 million contract negotiated in 1962 with the firm headed by Del E. Webb-a registered Democrat who says he's a sometimes contributor to both parties-to build the U.S. pavilion at the New York World's Fair.

But GSA refuses to discuss the money in

volved in the McCloskey deal in any terms, other than to say that the company was paid cost plus a 3.35-percent fee for the work. Even such general information as to whether

exceeded expectations is stamped classified. Rival builders declare that after they'd noticed construction activity beginning, they were told informally by GSA officials the contract amounted to between $2 and $3 million. But as it stands today, the mystery building is adjudged a $10 million

effort.

Nor will Mr. Byrne identify the building's occupants. Yet the saluting guard at the old Navy weapons factory enclave, site of

the mystery, cheerfully points out to the inquiring stranger this "Central Intelligence Agency Building." Thus, curiosity is heightened. CIA of course does secret spying, but

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