UNITED STATES OF AMERICA

tbPROCEEDINGS AND DEBATES OF THE 90 CONGRESS

SECOND SESSION

VOLUME 114-PART 18

JULY 24, 1968, TO JULY 30, 1968

(PAGES 22979 TO 24366)

UNITED STATES GOVERNMENT PRINTING OFFICE, WASHINGTON, 1968

CONGRESSIONAL RECORD~ SENATE July 30, 1968

,form of' government at the tinle. Wecriticized the old world and shut it outof our councils-but we took its moneyto build our roads and our railroads, todevelop our ports and build up our manu­facturing. We benefited greatly from tIleforeign aid which flowed from Europeuntil less than a century ago, and we arenow bound in formal alliance with thevery countries we once condemned ascorrupt colonial powers. What mighthave been the history of the world ifwe had not developed as rapidly as wedid, or if we had concentrated on eco­nomic relations with Asia instead ofwith the West? We should bear thesefactors in mind when we consider therelative importance of the developingnations today.

It was only a few months ago that Irose to report to my colleagues on alengthy tour of Africa. I was impressedthen, and I am still impressed, with theeconomic potential of that vast conti­nent, An area containing 65 percent ofthe world's gold, 96 percent of its dia­monds, nearly one-half its hydroelectricpower, as well as vast reserves of copper,aluminum, oil, and foodstuffs, is im­pOl·tant, to the United States and to theworld. Yet Africa is only one of manyareas of the developing world. When theresources, the land. and the populationof Asia and Latin America are added inas well, we find that the West couldconceivably be overshadowed in theworld economy of the future. We mustacknowledge that purely on the basisof "power" considerations, we cannotafford to risk the alienation from theWest of this growing and significantforce. I

But foreign aid is also important onthe basis of humanitarian considera­tions. I have seen the potential wealthof the developing world. But I have alsoseen its hungar, its disease, its illiteracy,and deprivation. I have seen the differ­ence which a highway can make in aregion, the jobs which a small assemblyplant can provide, the hope which a newschool supplies. I am not one of thosewho scoff at the humanitarian impulsein foreign affairs, who deride it as soft­headed and irrelevant to the hard calcu­lations of geopolitics.

The disease and despair which sap thestrength of millions of Asians and Afri­cans also saps the strength of the worldat large. When one great mind is lostbecause nobody cares or contributes toits growth. the loss is borne by us all.When a democratic government is over­thrown because it was incapable of keep­ing even its minimal promises to its peo­ple, we share in its failure. When a peopleturn to totalitarianism because capit&l­ism and free enterprise have dnly in­creased its debt. the blame often rests asmuch on the '"Vest as well as it does onthem.

Mr. President, I know that some of thedeveloping nations of the world havebeen guilty of gross mistakes: their cor­ruption is not our fault; their impatienceis often unwise and unproductive; theircriticism sometimes has been intemper­ate and unfounded. But the errors arenot all theirs, and we who are more ex­perienced and more highly developed

FOREIGN ASSISTANCE ACT, 1968

The Senate resumed the considerationof the bill m.R. 15263) to amend fur­ther the Foreign Assistance Act of 1961,as amended, and for other purposes.

Mr. BROOKE. Mr. President, theforeign authorization as passed by theHouse and subsequently reported to theSenate. contains a number of necessaryrecommendations and improvements. Asa matter of personal preference, I wouldnot choose to support reductions in therequested levels of expenditures. But Irecognize the depth of the economiccrisis which presently imperils our land.We are in a period of inflation. We dohave a serious balance-of-paymentsproblem. We have expended largeamounts of scarce capital on the war inVietnam. And we are faced with adomestic crisis which demands an in­creasing share of our national resources.For all these reasons, I can appreciatethe fact that some reductions are neces­sary; and I commend the committee forits recognition of the need for continuedaid. and for its endorsement of the pro­gram in these troubled times.

Foreign aid is the most concrete meanswe have to show that we share theaspirations of the less-developed lands.The United States has had its revolution.We developed our own form of govern­ment-and it was a very revolutionary

ORDER OF BUSINESSThe PRESIDING OFFICER. What is

the will of the Senate?Mr. HICKENLOOPER. Mr. President,

I suggest the absence of a quorum.The PRESIDING OFFICER. The clerk

will call the roll.The assistant legislative clerk pro­

ceeded to call the roll.Mr. BROOKE. Mr. President, I ask

unanimous consent that the order forthe quorum call be rescinded.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

the supplemental appropriation' wouldmean $15 million to California, $5.4 mil­lion to Virginia, $5.1 million to Texas,$4.9 miJIioI1 for New York, $4.6 millionfor Maryland. It would mean $1.1 millionfor the District of Columbia.

Mr. President, I would like to re­peat: Since 1951 States have almost al­ways received almost 100-percent en­titlement for this program. Both Housesof Congress are now on record as sup­porting full entitlement for the schoolyear which has now passed, Many schooldistricts operated this past school yearon budgets which anticipated these fundsand will face serious financial problemsif this supplemental is not released. Inaddition. the manner of payment forfiscal 1968 has produced a situation inwhich some districts will either have toreturn money alreadY awarded them orhave an amount subtracted from nextyear's entitlement.

I wish today, to alert my colleaguesto this situation and urge them to lookinto this matter of vital concern to pub­lic education.

TolaL ____ $395,390,000 $486, 355, 000 $90,965,000

Alabama_________ 8,955,406 10,888,075 1.932,669Alaska. _________ 9,762,046 12,172,490 2,410,444Arizona_______ ~ __ 6.285.722 7,837,792 1,552,070Arkansas ________ 1,953,560 2,435,933 482,373California________ 60.978,019 76.034,711 15,056,692Colorado_________ 10,290,723 12,831,708 2,540,985Conneclicul. _____ 2.616,498 3.262,564 646,066Delaware ________ 2,350,131 2,671,001 320,870District ot Colum-bia____________ 4,618,402 5.758,437 1.140.035Florida __________ 12.953,787 16,030.492 3,076,705Georgia ______ .. ___ 12,330,086 14,496,199 2.166,113Hawaii. _________ 6,857.193 8,550,371 1,693,178Idaho. __________ 2,418.106 3,015,185 597;079liIinois__________ 9,983,678 12,448,848 2.465,170Indiana__________ 3,039.259 3,789,713 750,454IOW3 _________ ._ • 1,787,388 2.228,730 441,342Kansas. ________ . 6.196,140 7,726,091 1.529.951Kentucky ________ 6,040,371 6,413,502 373.131Louisiana. _.' ____ 3.001.338 3,713,288 71l,950Maino._. _______ • 2,661.479 3,318,651 657,172Maryland ________ 18,746.284 23.377,258 4,630,974Massachusetts __ ._ 10.4\2.223 12,812,595 2.400,372Michigan ________ 4,981,623 6.211,685 1.230.062Minnesota____ . __ 1,7rAi,172 2, \27,460 421,288Mi:JsissippL._. ___ 2,478.037 3,089,9\4 611.877Missouri,. ____ ... __ 5,221. 005 6,510,176 1,289.171Montana "_. ______ 3,228,800 4.026,055 797.255Nebraska_. ______ 3,802.7eO 4.741,663 938.963Nevada __________ 2,719,033 3,390,417 671,384New Hampshire.. 1.859,828 2,3\9,057 459.229New lelSey. ___ ._ 7,904,435 9,856.198 1, 951.763New Mexico_____ • 7,912,906 9.866.76\ 1,953,855New York ________ 21,055,954 26,039.763 4,983,809North Carolina ___ 9,344,737 10,516,563 \.17:,826North Dakota _____ 2,359,730 2,942,395 582,61;5Ohio ___________ 9,660,120 12,045,397 2,385,277Oklahoma. ______ 8,932.441 H.138,039 2,205,598Oregon _____ .. ___ 1,945.923 2.419,913 473,990Penllsylvania _____ 7,3\3,773 9,0\8,024 \,704.251Rhode Island _____ 2,638,017 3,289.396 651,379Soulh Carolina ____ 6,682,898 8,041,698 1,358,80USoulh Dakota .. ___ 3,446,992 4,296,706 849_ 714Tennessee. _____ . 4,915,534 6.129,278 1.213,744Texas __ . ____ 7.0,904.63\ 26,066,402 5,t61,771IJI<Jh _... ________ .

4'm:~~5,618.230 1,1l2.544

Vermont .. __ ., .. _ \52.758 30.250Viq~il1ia_________ 24,455,489 29,794,811 5,339,322Washington. ___ . ~ 10,549.718 13.154,654 2,604,936West Vilginia. ___ 465,327 580,226 114.899WbCOIISiIL~ _. ___ J.669,789 2,082,093 4\2.304Wyoming ____ ,. __ J, 304, 017 J. 626, 005 321,988Guam .. ___ ."_. 1,307,307 I. 630,107 322,800Puerto Rico______ 5,429,002 5.465.710 36,708Virgin Islands. ___ 104,419 130,202 25,783Wake Island _____ 223,610 223,610 ____________

1\1'1'. SPONG. Mr: President, as thechart indicates. every. Slate would beaffected. I would now only point out that

Stale or terrilory 1968 1968 Differenceappropriation entitleme.I

areas program during. the fiscal 1968 pe­riod. And, on future audits of the FederalGovernment, this appropriation willshow up on the fiscal 1968 accounts.

Since the impacted areas program wasinitiated in 1951, school districts havealways received almost 100 percent en­titlement for this program. Without thisappropriation, the eligible districts willreceive only So-percent entitlement forthe 1967-68 school year. Yet many schooldistricts planned last year's budget andoperated during the school year whichjust passed in anticipation of thesefunds. Now, after the school year is over,the school districts are being told thatthe funds will not be available. On Feb­ruary 20, when Senator FuLBRIGHT intro­duced an amendment which I cospon­sored to provide the supplemental ap­propriation, he inserted into the CON­GRESSIONAL RECORD a chart showing howmuch the supplemental would mean tovarious States.

I ask unanimous consent that thechart be reprinted at this point in theRECORD.

There being no objection, the chartwas ordered to be printed in the RECORD,as follows:SUMMARY OF AllOCATION AND ESTIMATED NUD, PUBLIC

LAW 874 AS AMENDED, FISCAL YEAR 1968

July 30, 1968 CONGRESSIONAL RECORD - SENATE 24177bear a major responsibility for the wel­fare of the whole.

Looking over the bill as passed by theHouse and reported by the Foreign Re­lations Committee this year, I wastempted to introduce an amendment re­storing the full amount, $765 million, re­quested for the Development Loan Fund.I would like to see us allocate $235 mil­lion for technical, cooperation, ratherthan the $200 millior. presently contain­ed in the bill. Though I have never beento Latin America, I have an appreciationfor the distance these countries musttravel and for their importance to Amer­ica and to the world: I would like to seeus grant the administration's full re­quest for the shaky Alliance for Prog­ress. Our contributions to inte1nationalorganizations are of critical importancenot only in maintaining these bodies butin maintaining their credibility and ef­fectiveness; I believe these should re­ceive full iunding as well. Finally, I wouldlike to see the full amount restored forsurveys of investment opportunitiesabroad, for it is only through private in­vestment, through capital accumulationand domestic savings, that the develop­ing nations of the world will be able toattain a level of even moderate economicviability.

All of these programs are important tous, and critical to the well-being of therecipients. But if there is one provisionin the bill which will hurt the developingcountries the most while helping oureconomy the least, it is the provision in­creasing the interest rate on develop­ment loans.

In talking with the leaders of a numberof African states, I was startled to learnthat many of these countries-poor andstruggling as they are-are on the vergeof becoming capital-exporting states.In practical terms, this means that' thetotal reven'les they receive from sellingtheir raw materials abroad, from privateinvestment, from intergovernmental andinternational loans, and even from tour­ism and other sources, does not equal theamowlt of hard currency they must payout in interest and amortization on de­velopment loans.

In Liberia, for example, which hasbenefited the longest from Americanlargesse, the largest single item in thenational bUdget is service charges oninternational debts. Such charges areexpected to reach a peak in 1969 of one­third of th':l total national bUdget. YetLiberia is a wealthy country by Africanstandards. and enjoys liberal shares ofAmerican and European private invest-ment. .

Other countries, such as Ghana andthe Congo-Kinshasa-have not beenso fortunate; they have been unable tomeet their intemational obligations andhave fOWld it necessary to call in inter­national assistance to reschedule theirleans, devalue their currency, and extendsupporting loans to keep their economygoing.

Sustained and reasonably rapid devel­opment of the newer nations of the worldis in our national interest as well astheirs. But acceleration of this processis predicated upon increased internalcapital formation, aided and often sup­ported by continued net capital inflow

. from the industrialized countries.CXIV--1523-Part 18

The new nations need, first of all, todevelop their infrastrucLure. To do this,they need to import substantial quanti­ties of capital goods; they need to ex­pand production; they must educatetheir people, employ them, and tax themin order to create domestic savings whichcan be returned to the economy in theform of investment. Every dollar whichthey save, and can put back into theireconomy in the form of an investmentin roads or schools or processing plants,may reap retums of tenfold or fiftyfoldor a hundredfold in the future', But ifthat dollar is paid to Brita.in or Franceor the United States in the form of in­terest on an intemational debt, it willbe of no value to them, while represent­ing a minimal gain-if that-to the rich­er industrialized states.

A study conducted by the World Bankin 1964 showed that the external debtof developing countries rose from $8billion in 1956 to $27.5 billion in 1962.By the end of 1964, that figure stood at$38 billion. Today it is $44 billion. Theannual cost of servicing this debt is $4.1billion. As a percentage of GNP, the debtincreased from 5.9 percent in 1956, to17.8 percent in 1964.

Under these circumstances, it appearsto be exceedingly counter-productive toincrease the interest rate on our devel­opment loans. Our aim should be to makeit easier, not harder, for the new nationsto meet their international obligations.It stands to their credit that so far thedeveloping nations have taken greatpains, even foregoing projects wpichwould spur their OW'll development andgreatly improve the lives of their people,in order to repay their debts to the West.No poor nation should be required to ex­pend one-third or one-hali-or even one­tenth-of its hard-earned national in­come on repayment of loans to the rich.

The terms of intemationalloans shouldbe extended and made softer, not harder,so that repayment will come at a timewhen the debtor country is more eco­nomically advanced and the servicingcharges and amortization will representa less drastic proportion of the total na­tional income. Terms of 40 or 50 years,with interest rates of 1 percent or less,would not be unreasonable if our objec­tive is truly-as I believe it is-to enablethe new nations of the world to becomeeconomically viable and politically stable.Surely if we could extend Lend-Lease andMarshall Plan aid to the industrializedcountries of Europe at no interest what­soever, and in the case of Lend-Lease,with no real expectation of repayment,we can extend loans of lesser amountsto poorer countries at terms which arebetter than those recommended !n thepresent legislation.

Mr. President. I send to the desk anamendment which would restDre therate to its present level of 2 and 2 J 2percent.

The PRESIDING OFFICER Theamendment will be stated.

The assistant legislative clerk read asfollows:

On page 17. strike out Jines 4 to 15. in­clusive, and insert in lieu thereof the follow­ing:

"SEC, 101. Section 202(a) of title I of chap­ter 2 of part I of the Foreign Assistance Actof 1961, as amended, which relates to author-

izatlon for the Development Loan Fund, Isnmenc:lcd as follows:".

Mr. MUNDT. Mr. President, for therecord, I want to give my reasons forhaving supported the committee inter­est-rat.e amendment-having authoredit, in fact-and my reasons for feelingthat the amendment offered by the dis­tinguished Senator from Massachusetts,well intentioned though it is, would, inmy opinion, be a backward step in thewhole program of America's trying to beof assistance to other areas of the world.We now have a foreign-aid measure be­fore us which is the lowest since the be­ginning of the program in authoriza­tions-less than $2 billion.

Most of those cuts emanated from theHouse, where we hear reports now thatthis is just a beginning, that this is justthe authorization bill, and that when theappropriation blll comes before theHouse it is going to get substantiallyadditional cuts.

I also know of some Senators withaD1endments in their pockets to reduceSUbstantially the aD10unt authorized inthe bill.

One of the reasons for the sharp at­tacks on· the foreign-aid program is thefact that for far too long 'we have notdealt candidly with the American publicin distinguishing between what is a de­velopment loan and what is a grant.There have in the main been two differ­ent names for very similar programs, be­cause when we started this business oftrying to divide up and divorce loansfrom grants, the loan program carriedthe ridiculously low and unrealistic rateof one-fourth of 1 percent interest.

Mr. President, in company primarilywith the distinguished Senator fromOhio [Mr. LAUSCHE] and with SenatorSYMINGTON missing, who are not presentat the time I am speaking, we beganoffering amendments and working theinterest rate up from one-fourth of 1 per­cent to one-half of 1 percent. to 1 per­cent, and finally last ,year to 2 percent.

Since then, we are well aware of whatis happening to interest rates around theworld and at home. The farmers repre­sented by the Members of the Senate arepaying the highest interest rates in thememory of anybody currently engaged infalming and ranching in this country.The householders are confronted withhigh interest mortgages and are con­fronted with the same problem in theirpersonal borrowings. American interestrates have skyrocketed to new and dan­gerous heights.

High interest rates are reducingsharply the program for new home con­struction which is so highly importantin this country. Small businessmen andindividual entrepreneurs are faced withhigh interest rates which are fantastic interms of the normal interest they usedto pay.

For us to fail to recognize this signifi­cant economic fact and to revert nowback to 2 percent, would be to drive aknife directly at the heart of the wholeforeign aid program, because both in theHouse and in the Senate there wouldunderstandably and properly be effortsmade to reduce SUbstantially the amountof money included in the bill-$1.9 bil-

24178 CONGRESSIONAL RECORD - SENATE Julylion-by perhaps another $500 milllonor more.

\Ve do have a foreign grant program tomeet the kind of problems discussed bythe Senator from Massachusetts. Wherethere is some urgent need in dire, calami­tous circumstances, we not only have agrant program, but we also provide acontingency fund for the President thathe can make available on any terms hechooses-usually no interest at all-tohelp meet such problems.

Confronted with the challenging prob­lems in Africa to which the distinguishedSenator has addressed some of his re­marks, the pending bill contains funds ina very limited degree for a markedlysmall percentage of the problem coun­tries in Africa. And one reason that it hasnot been expanded to include othercountries in Africa where conditions areanalogous, where the problems areequally m:odigious, is that first we wantedto figure) out if we could work out aviable. economically sound, justifiableprogram of development loans andgrants as a mixture for the strugglingnew countries of Africa.

n we were now to eliminate the sound,economic concept of a fairly legitimateinterest rate, we might well be puttingan end to an African program which maybecome increasingly significant to thiscountry and to that continent in theyears to come. We have to mix ourhumanitarianism with a sense of reality.

Mr. President. this country is on theverge of financial disaster. And if wecollapse, it certainly is not going to beof any benefit to countries in Africa oranyplace else in the world if the onestrong, friendly power to which theycome seeking assistance is unable evento meet its own obligations.

This is the Congress which passed the10-percent surtax on the incomes ofAmericans and· porporationsbecause ofthe dangerous fires of inflation. One ofthe great signals suggesting the need forthis surtax was the astronomicalinterest rates being paid at home byAmericans.

At the same time, we included in thepackag.e a provision that we would cutback expenditures by $6 billion, and weput limitations on the Federal payroll.

We did this not because a singleSenator or Representative who voted forthe package had a desire to do it, butbecause we were compelled to do it out ofa sense of responsibility to meet ourfiscal problems.

Surely one of the concomitants has tobe that we have to consider with equalprudence our spending abroad as we doat home. We must come clean with theAmerican public and maintain a sub­stantial difference between a grant anda loan.

What are the rates that are incorpo­rated in the committee bill? Mr. Presi­dent. it is 3 percent for the next 10veal's. That is less than one-half of what;n American farmer pays. This is lessthan half of what a great many bor­rowers in America pay for their interestrates. We did not say we wanted to getback all that it costs America to borrowthe money to loan to these othercountries.

Mr. BROOKE. Mr. President, will theSenator yield for a question?

Mr. MUNDT. Yes.Mr. BROOKE. Can we really compare

the purpose and philosophy of foreignassistance with the problem of theAmerican fal'mer?

When we give foreign assistance, it isnot our purpose mainly-or our purposeat aU-to make money on our loans. Weare-not in the foreign assistance programfor any gains that we call make Or derivefrom money we give to those countriesfor foreign assistance. And it is not agrant. They are paying these sums backto the American Govenilllent.

The question here is, can they affordlarge interest rates? Is it self-defeatingto increase the interest rates at a timewhen the servicing charges are alreadylising to one-third of their national in­come? How can they afford to pay backsuch large interest rates on the moneywe give them?

Mr. MUNDT. I quite agree that it isnot the purpose of the foreign aid pro­gram to make profits for America. At thetime the Senator asked me to yield, I waspointing out that, in the main. we weregranting foreign aid borrowers an inter­est rate less than half of what we chargeourselves-almost. and in many in­stances less than. half what it costsUncle Sam to bOI'row the money.

The Senator must keep in mind thatthe loans we are making are not madefrom the abundance of this country, notfrom our surplus. We go out in Amel'icaand borrow the money. frequently pay­ing more than 6 percent. for the purposeof loaning it abroad at 3 percent. Thereis no effort to make a profit on it.

Mr. BROOKE. Mr. President, will theSenator yield?

Mr. MUNDT. Permit me to answer thesecond point. The Senator's second pointwas that some countries would find itdifficult to pay' 3 . percent interest.

First of ali, tl-iat is the best bargaincounter in the world to which they cancome. No place else in the world can theyget money at 3 percent interest. Inmany of these countries, especially inLatin America, the prevailing rate ofinterest is 10 percent, 12 percent, 25percent, and as high as 30 percent. Noplace else in all the world can they geta 3-percent interest rate.

Now, if they are in such dire circum­stances that they cannot pay a 3-percentinterest rate ('In the loan, it seems to methat we should call it a grant; because itis obvious, then, that they cannot pay theprincipal and they cannot amortize theloan. and they can never square that ac­count.

There may be places where we shouldhelp in that way. I have voted for thatkind of assistance. We have a grantfund for that purpose. The President hast'. fund for that purpose. But there is noreason to deceive the public by givingthese countries what is called a loan, andthen have t.he interest rates so ridicu­lously low that, in addition to the prob­lematical question of whether they willrepay the principal, you subsidize theirinterest payments at over 3 percent peryear per loan.

MI'. BROOKE. These· countries wantto help themselves. They do not wantgrants. in the main.

Mr. MUNDT. There are not very manyof those; but, if there are any, I wouldbe happy to have them come here ingreater numbers.

Mr. BROOKE. They are asking forloans, not for grants, and they are askingfor them at a low interest rate. which isunderstandable. It is certainly better forusto give them a loan than to give thema grant or a handout.

Mr. MUNDT. It is not. very muchbetter, if it is cut down to 2 percent. Itdoes not make it much different. If theinterest rate is that low, you are prac­tically subsidizing the whole thing, any­way.

May I point out that long before thedistinguished Senator came to the Sen­ate, Senator LAUSCHE and I began to ex­plore this matter. Not only was the in­terest rate one-quarter percent, but.also, we gave them a 10-year graceperiod in which they paid no interestand no principal. And we found out thatin many cases, after 10 years, the fel­low who made the bargain and signedthe loan had been shot out of the saddleor had died or had been defeated in anelection. He was not around, and hissuccessor was not going to assume thoseresponsibilities. So we decided that wehad better institute some bookkeepingprocedures, and that they should startto make some payments immediately.

If I had my way, in addition to the3 percent. I would have them pay at leastsome fractional percent on the prin­cipal, and begin the amortization pro­cedure without the 10-year grace period,so that they would get good bookkeep­ing habits and have the sound fiscal ex­perience of realizing that a loan mustbe repaid and that bhey must startbudgeting procedures in their own coun­try, in order to make some repayment.

However, because I, like the Senatorfrom Massachusetts, am kindheartedal1d want to help them as much as pos­sible, we are not insisting on their re­paying the loans at once. We are givingthem a 10-year grace period duringwhich the interest rate is only 3 percentwith no repayment.s on the principal.That is all they pay. The remainder isfrom Uncle Sam.

Mr. BROOKE. Certainly. the Senatol'is aware that the profit to the UnitedStates and to the world is the economicviability and political stability of thesedeveloping nations. Although we do notexpect to derive any financial profitsfrom our loans, it is a In'eat profit tcthe United States that these countrieshave political stability. and so it is asound investment to lend them thismonoy.

Mr. MUNDT. That is why I voted forthe foreign aid program. )

Mr. BROOKE. It is a sound invest­ment to lend them this money at all in­terest rate they can afford to pay andnot compel them to use up one-third oftheir national income to service the debt.

Mr. MUNDT. If they will start spend­ing a little less money on super jets andall kinds of modern military establish­ments in all these infant countries.where they have no possibility of everbuilding an army big enough to defendthem against a great attacker, and getrid of some of the cOlTuption and have areasonable tax rate. it would help. Three

July 30, 1968 CONGRESSIONAL RECORD - SENATE 24179

percent is a very small interest rate forthem to pay.

Mr. BROOKE. I am not talking aboutthe building of armies but the buildingof· roads and schools and hospitals.

Mr. MUNDT. In many instances wegive them grants for that.

Mr. BROOKE. The U.S. Governmenthas recognized the value of low interestrates in its own domestic policies. In thehousing bill which passed the Congressrecently, we recognized that many of thepeople living in poverty in the UnitedStates today cannot afford to pay thenormal interest rates in this country. Sowe have a sliding scale providing for am1nim.um interest rate of 1 percent con­tained in that bill. Thus low interestrates are not unusual for our Govern­ment.

Our Government is not acting solelyfrom humanitarian motivations; it isalso acting from a very pragmatic pointof view. It understands that there is nopoint in charging interest rates to peo­ple who cannot a1ford to pay those in­terest rates. The developing countries arein the same dire circumstances in whichwe find people who are living in povertyin this country.

I agree with the distinguished sena­tor that we are in a financial crisis athome, and I believe this has been reflect­ed in the cutback .in foreign assistance,in the first instance. I would muchrather give these countries x number ofdollars in foreign assistance at an in­terest rate they will be able to pay, thanto give them that amount of money atan interest rate they cannot afford.

Mr. MUNDT. I am sure if the Senatorcould have his way, he would push theseinterest rates dOVl-"I1 now, in an era whenthey are climbing allover the world, in­cluding our own country, and compellingus to subsidize by 4 or 4% percent. Butthe committee is willing to subsidize itup to 3 percent. There would be manyhundreds of millions of dollars less inthis particular aid bill were it not forthe fact that we did put in some honestyin the fiscal requirements. We did notraise the interest rates to what we haveto pay for borrowing the money, butmoved a little in that direction and in­creased it by 1 percent; and we made abetter distinction between what is agrant and what is a loan. This is im­portant. And we will have to keep thatdistinction.

We do give some grants to build a hos­pital or a school. \Ve do not expect toget that money back. When it is a loan,certainly it is not too much to ask theforeign country to pay back half theinterest rate that we must pay and thuswe arrived at the 3-percent rate.

It is not done to make a profit. It stillmanifests a great deal of good will onour part and a desire to create whateverpolitical stability and economic viabil­ity these grants provide.

If the SenatoQr will take a look at the$125-odd billion we have spent so far inthe foreign aid program and if he willexamine the 104 countries to which thatmoney ,has gone, he will be terribly dis­appointed when he caUs the roll of thecountlies that have attained economicviability and political stability as a con­sequence.

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

Mr. MUNDT. I yield.Mr. CASE. I believe this has been a

very useful exchange, on a level thatdoes the Senate credit.

The Senator from South Dakotaknows this subject from long expeli­ence; and the Senator from Massachu­setts knows it from a shorter expeliencebut from a deep study of it. There isright on both sides.

The di1ference between 2 percent aI¥i3 percent is not very large. The questionis: Where do we put it? My own consid­eration of this matter has led me to theview that until we have had the kind ofdeep study of this foreign aid programthat I hope is going to be instituted un­der the guidance of our Committee onForeign Relations-the chairman, as theSenator knows, has been considelingplans for this for some time-it might bewell to leave the situation in its presentstate so far as the interest rate on de­velopment loans is concerned. That iswhere I come to rest on this question.

I think the Senator from South Dakotaand the Senator from Ohio, and others,have done a real service in, as the Sen­ator said, requiring that we make a realdistinction between loans and grants inthis entire business of. foreign aid. Ithink we have done that. An interest rateof 2 percent is not high. it involves asubsidy; so does 3 percent. There is in­volved only the question of how much.

It seems to me we have establishedthat we are making loans and not grantsunder the development loan program. Itmight be well to hold the 2 percent ratefor another year or so until we have donewhat I think we must do, which is tomake a very, very careful study as towhether our program is sound in all ofits aspects, if it is sound in any event,indeed.

Recently many people have studiedthis matter. Gunnar Myrdal has studiedthe matter very deeply, and he has comeUP with the conclusion that for the mostpart foreign aid has not been very help­ful; that there is not very much a coun­try can do for another country if the re­cipient country is not going to make theeffort itself; and that much of our for­eign aid program has been wasted moneyand has gone the wrong way.

Such conclusions are shocking to lib­eral groups, to which Gunar Myrdal hasa right to belong and does belong.All of this indicates we should have abasic look at this matter. I suggest thatin considering this question no real harmcan be done in the distinction betweenloans and grants by leaving the interestrate at 2 percent for the next year.

I think I find quite persuasive the gen­eral proposition that "You do not giveor lend money to anybody for anythingthat is not worthwhile," Once it is de­cided to do this then it is done on thebasis that would be most helpful to thecountry to which the money is gi\·cn.

Mr. MUNDT. And that is the point.The loans define themselves as to developsome kind of viable economic interest,or enterprise, or activity over there; andthey should be able to pay legitimateinterest.

Mr. CASE. The bulk of this has to bedone by recipient countl'ies themselves.

Mr. MUNDT. The Senator is correct.Mr. CASE. All grant and aid programs

are going to do very little except makea marginal difference. .

Mr. MUNDT. A development loan isa sort of extended technical assistanceto supplement technical training with alittle seed money, but if that is to bedone, certainly they can pay 3 percenta year, which is a nominal interest rate.Primarily we are talking about a 1 per­cent difference. It is 2 percent now. Thequestion is: Is 1 percent additional goingto bankrupt the foreign country? If so,its enterprise is not working and theprogram is not properly planned if. itcannot make that kind of payment.

Mr. President, I speak as one whosupported and voted for this foreign aidprogram in committee and on the floorof the Senate. This whole aid concept,however, is going to be driven into theground by hollering too long, too loud,for too much. It is a little like complain­ing about the goose that laid the goldenegg because you did not find a 14-caratdiamond in the yoke of the egg.

I have served on the Committee onForeign Affairs in the other body. I alsoknow the sentiment of Senators whoserve on our Committee on Appropria­tions in the Senate. This is an autholi~

zation bill and it is still subject to majorcuts. In my opinion major proposals tocut will be offered, and in my opinionthey will be valid if we are going to shovellthis money out at such cheap interestrates when American citizens are payingover twice the rate being asked abroadand when every taxpayer is being askedto subsidize at 3 percent every dollar wemake available.

It is fruitless and futile to debate thismatter further among ourselves. I askthat the yeas and nays be ordered if theSenator determines to press his amend~

ment. We can debate it later in theafternoon when we have a larger at­tendance to hear our views.

Mr. CASE. It would be a shame to haveany more pearls drop on the barren soil.

Mr. MUNDT. They may all be read inthe RECORD tomorrow, but that does nothelp much if we are to vote today.

Mr. CASE. Two percent is not too bad.There was a time when the farmers ofthis country and those in rural areaspaid 2 percent to bring in electricity. Itdid not mean that those people were nogood, but they could not a1ford more. Bygiving them electricitY,it brought themin in a way that has been ·enormouslyhelpful in raising the standard of livingin our rural areas and in our city areas.because the market is improved byprosperous farmers. So it is not strangeto have a subsidy for this kind of thing.

Mr. MUNDT. I am willing to let thesubsidy continue up to the extent of the3-percent len1.

Mr. BROOKE. This I-percent increasein the interest rate is quite sizable. TheSenator says it is insigni.f1cant, buteverything is relevant.

1<11'. MUNDT. Not sizable in view of theamount of the loan. I am convincedmany recipient countries would be cutout of all loans if the rate is going to bechiseled down to 2 percent.

24180 CONGRESSIONAL RECORD - SENATE July 90,Mr. BROOKE. I would like to add that

default in these international loans hasnot gone above 5 percent. I think that issignificant. I think it is a statistic thatshould be included in the RECORD.

Mr. SPARKMAN. Mr. President. Iwish to address the Senator from. Mass­achusetts. We had a vote on this matterin committee. The vote was 10 to 6 infavor of the amendment offered by thedistinguished Senator from South Da­kota. I do not mind saying that per-"sonally I voted against it because I feltvery much as the Senator from lI;Iass­achusetts has brought out here. Afterall, these loans are for the purpose ofhelping emerging nations to develop aneconomy of their own and to help themget on their feet so they can buy prod­ucts. In other words. this is not whollYcharitable on our part. There is a greatdegree of chality in it, but we are tryingto get it established to the point they canbuy products we manufacture in thiscountry that we do not sell to more ad­vanced nations and industrial nations,but that we can sell to them. If we de­velop thosemarkets, the bread cast uponthe waters is going to return with greatbenefits to us.

Therefore, I felt we could very wellafford the low rate of interest. To us,the rate is low. To many of them it isnot low because it is difficult to raise themoney to make the interest payment andto make their payments on the loans.

One thing for Us to remember-andI am afraid many of our people over·look the fact-is that these are not give­aways. We have gotten away from thegiveaway programs long ago. These areloans, payable in hard money. The in­terest is also payable in hard money.There is no soft currency, no local cur­rency involved in this at all. Not onlythat, but the countries to which overthe past decade, even over the past twodecades, we have made loans have a veryfine record of repayment. as well as pay­ment of the interest. When we take thosethings into consideration and take allthe benefits that have come to us in thenature of payments on interest andplincipal. and make the reductions, wefind that this figure. instead of being$122 billion, $142 billion, $170 billion-Ihave seen all those figures used at differ­ent times-and adually I tried to bringout some of those paints in the talk Imade yesterday afternoon initiating thisdebate-it comes down to considerablylower than that.

I am in complete sympathy with theSenator's amendment. I voted for it incommittee. I said what I could for it.But the vote in committee was 10 to 6against it, and that is the reason that itwas not written into the bill.

Of course another thing for us to re­member is that this legislation will bein conference between the Senate andthe House, because the House bill reota}ns the old rate of interest.

That is all I care to say at this time.Mr. BROOKE. I thank the distin­

guished Senator from Alabama andwould point out that I was aware of thecommittee vote of 10 to 6. Judging fromthe statements of the Senator from NewJersey [Mr. CASE] on the floor this after-

noon it seems clear that had he beenpresent and voting, he would have op­posed the increase in, the interest rate.That would have made the vote 10 to 7in committee.

Mr. MUNDT. That is still a majority,however.

Mr. BROOKE. Of course-yes. but itwould have been a closer vote if the Sen­ator from New Jersey had been voting.

Mr. President, I suggest the absence ofa qUOrum.

The PRESIDING OFFICER (Mr. TYD­INGS in the chair). The clerk will callthe roll.

The bill clerk proceeded to call the roll.Mr. BROOKE. Mr. President, I ask

unanimous consent that the order forthe quorum call be rescinded.

The PRESIDING OFFICER. Withoutobjection, it is so ordered.

Mr. BROOKE. Mr. President, in viewof the vote of the Committee on ForeignRelations. in view of the discussion onthe floor of this matter today, and inview of the position of the House on the2-percent rate, I would hope that in con­ference the House version of a 2-percentinterest rate would be followed and ad­hered to.

Falling short of that. I would hope thatour conferees would take into considera­tion the points made in debate here thisafternoon. and that they will come tosome agreement, if not to the 2 percent.then certainly no more than 2% percent.

In accordance with that, Mr. Presi­dent, I withdraw my amendment.

The PRESIDING OFFICER. Theamendment is withdrawn.

The Chair now recognizes the Sena-tor from Minnesota [Mr. MONDALEJ. I

Mr. MONDALE. Mr. President, I sendan amendment to the desk and ask thatreading of the amendment be dispensedwith., The:PRESIDING OFFICER. Without

objection, it is so ordered; and theamendment will be printed in the RECORDat this point.

The amendment offered by Mr. MON­DALE, is as follows:

On page 17. lines 18 and 19, strike all ofsubsection (2), and insert the following inlieu thereof; ,

"(2) After 'year 1968,' insert 'and $550,­000.000 for the fiscai year 1969. of whicl1$200.000,000 shall be expended solely for pur­chase by recipient countries of fertilizer.seed, pesticides, farm equipment and supplies.and other goods directly used in agricul­tural development. Priority shall be given tothose recipient countries devoting substan­tial resources to agricultural self-help anddevelopment',"

Mr. MONDALE. Mr. President. reduc­tions thus far made in the developmentloan authorization in the foreign aid billare extremely severe. They will seriouslycripple and retard the beginning of theaglicultural revolution in the starvingareas of the world.

The specter of famine still hangs overmuch of the population of the world,particularly over the peoples of Asia. De­velopment loan funds are central to theeffort to dispel this specter, and are usedto finance imports by the United Statesto the leSs-developed nations. such asfertilizer, seed, pesticides. and neededmodern farm equipment.

There is now underway in Asia anagricultural revolution, extending fromTurkey to the Philippines. and encom­passing countries containing well over 1billion people.

This agricultural revolution in Asiamay be the most significant, worldwide.economic development since the recon­struction of Europe following World WarII.

I think this is a fact of which Con­gress and the Senate in particular is notfully aware.

In the July 1968, issue of Foreign Af­fairs, there is a remarkable article writ­ten by Mr. Lester Brown. one of theforemost experts on the world food prob­lem and now serving with the Depart­ment of AgriCUlture. The article is en­titled. "Agricultural Revolution in Asia."

He states, on page 698, that as a re­sult of certain changes that I am dis­cussing particularly:

It Is conceivable that the 2 percent rate ofincrease In food production prevalling dur­ing the early and mid-1960s could accelerateto 4 or 5 percent yearly over the next fewyears, provided markets can absorb the addl­t.ionul output. The additional purchasingpower thus generated for both productionand consumer goods will stimulate a morerapid rate of growth In the non-farm sector.The net effect should be a much more rapIdrate of overall economic growth than wouldotherwise have prevailed. If the Asian agri­cultural revolution continues, It could wellbecome the most significant world economicdevelopment since the economIc rebirth ofEurope following World War II.

Let me just indicate the magnitude ofsome of the agricultural advances illseveral key counties. India's feed grainharvest is up 32 percent over last year'sdrought-depressed levels and, more im­portantly, 12 percent above the previousrecord. Pakistan's wheat harvest is up40 percent over the previous record. Cey­lon's rice crop is up 13 percent. ThePhilippines is self-su1ficient in rice fo)'the first time since 1903, and may eVt;dbe an exporter this year.

The most significant aspect of thisrevolution from our point of view is theextent to which it is U.S. inspired andgenerated. The U.S. involvement. bothpublic and private, is in, evidence inevery important area. AID and USDAhave contributed to the formulation ofneeded agricultural policies, Our land­grant colleges and W1iversities havetrained the Asian agriculturalists whoare leading this revolution. AID fundshave financed much of the rural infra­structure and the import of fertilizer.Agricultural research programs of theFord and Rockefeller Foundations havedeveloped the exciting new high-yieldvarieties of wheat and rice. And U.S.firms are building a'majority of the fer­tilizer plants in these countries.

We have triggered a revolution in foodproduction in the rural economies ofAsia, and can take a great deal of pridein this national achievement.

The art.icle to which I earlier referred,by Mr. Brown, points out the revolution­ary character of the high-yielding varie­ties of cereal seeds now being used inAsia. These seed varieties were developedat the International Rice Institute in thePhilippines, funded jointly by the Rocke­feller and Ford Foundations. Other simi-

July 30, 1968 CONGRESSIONAL RECORD - SENATE 24181Jar creative work has developed new seedvalieties elsewhere.

Mr. Brown points out that areasplanted to the new varieties went from afew hundred acres in 1964--65, to 23,000acres in 1965-66, nearly 4 million acres in1966-67, and 20 million acres in 1967-68,the crop year just ended. Plans and ex­pectations for next year indicate an ex­pansion of up to nearly 40 m1llion acres.

These new seed varieties often doublethe yields of traditional varieties. Theirsuperiority; according to Mr. Brown, isso obvious that farmers are quickly per­suaded of their merits. This contrastssharply with improved varieties madeavailable in the past, which were onlymarginally superior to the varieties be­ing used.

These new seeds have enabled Asiancountries to shorten materially the agri­cultural development process.

There are many. many other featuresof these new seed varieties, such as theirshort-stem characteristics, which pre­vent lodging, which means becoming top­heavy and falling down. They are moreresponsive to fertilizers at all levels ofapplication.

These'seeds are adaptable to a muchbroader range of latitudes.

Mr. Brown states that the new varietiesripen in 120 to 125 days. contrasted with150 to 180 days in oldervlti:ieties. Theyare not as sensitive to varying lengths ofdaylight. Because of the shorter growingperiod. with adequate water some farm­ers in the Philippines and India are har­vesting two. and even thl'ee, crops a year.

To show the revolutionary nature ofthese new seed varieties, there has beenproduction in some areas of 8 tons peracre per year, contrasted with averageearlier rice yields in Japan of 2 tons orwheat yields in Europe of less than 2 tonsper acre.

There is no question that this new re­markable development is in fact creatingan agricultqral revolution in Asia.

Mr. CLARK. Mr. President, will theSenator yield?

Mr. MONDALE. I am delighted toyield to the Senator from Pennsylvania.

Mr. CLARK. As I un4erstand the Sen­ator's amendment. it would increase theauthorization in the bill by approxi­mately $200 million. Is that correct?

Mr. MONDALE. The Senator is cor­rect.

Mr. CLARK. And the increase wouldgo to supply countries which are en­deavoring to raise enough food to supplytheir populations, many of which arenow SUffering from malnutrition;enough food to maintain a decent stand­ard of life.

Mr. MONDALE. That is correct. Theadditional authorization I have re­quested would be tied to the agriculturalproblem and the food problem.

Mr. CLARK. The net result would beto help feed the hungry with new andextraordinarily splendid research anddevelopment in agriculture which hasenabled us to obtain greater nutrition atreally less cost.

Mr. MONDALE. The Senator is cor­rect.

Mr. CLARK. I am happy indeed to. support the Senator.

In my individual views, which I filedwith the report of the committee, onwhich I have the honor to serve, I stated:

I regret the cutbacks In the foreign aidprogram Which nre made In this bill. Thesecutbacks are not Justified either on groundsof economy or of performance by the Agencyfor International Development.

TIle bill as reported by the Committee onForeign Relations involves a reduction of al­most $1 billion from the administrationrequest. The saving thereby effected is 5ub­stantially less than 1 percent of tIle FederalbUdget. but it will be made at great cost toour foreign policy.

The bill as reported is almost $400 millionbelow the total amount of economic assis­tance approved by the House Committee onForeign AlIairs. I would have supported thePresident's original recommendations. At theleast, I supported the levels of the HouseCommittee's bill as a bare minimum, butwhen I moved to restore those figures In theForeign Relations Committee, the motionwas rejected by a vote of 3 to 15.

I am happy to see that the senatorfrom Minnesota is, in this amendment,at least restoring some part of the fundsthe President requested, and which Ithought were justified. I think the areain which he moves to help the peoplesof underdeveloped areas of the world ispraiseworthy. I am happy indeed to sup­port his amendment,

Mr. MONDALE. I thank the Senator.I agree' with him that the President'stotal proposed authorization should be

.approved. I think it is unlikely at thistime that Congress will do so. There areother areas that need additional fundingfrom our own standpoint and in termsof our need to help develop a stableworld; but it seemed to me particularlyironic that side by side with this agri­cultural revolution, which is full of somuch potential for peaceful developmentin the world, we should be cutting theassistance necessary to promote thatdevelopment practically down to nothingat this time. I think we are doing aterribly unwise thing.

Mr. CLARK. I thank the Senator forhis remarks. I concur entirely in whathe has just said. I fear that some of usin this body are losing our sense of real­ity and our sense of priorities, and in­deed our sense of compassion, in whatseems to me to be a headlong effort tocut off programs which have been of somuch help to the world and of greatcredit to the United States.

Mr. MONDALE. I thank the Senator.As the Senator knows, one of the mostextensive programs and one of the mostexciting humanitarian programs everundertaken by the Congress is the food­for-peace program, which has essentiallybeen a program of food assistance forthe starving peoples of the world.

Now. for the first time, because ofthese exciting new seed varieties andother developments in food-deficientcountries, we have an opportunity tostart prodding t.hem toward food inde­pendence, to the point where not onlywill their people be fed, but their econ­omies \I'm have a chance to take offin other ways and be more self-sufficient.The chances for direct savings in theAmerican bUdget in the not too distantfuture are obvious. But even more im­portantly, we have a chance here to con-

tribute to this peaceful revolutionarydevelopment, to the point where thesecountries can be more independent andmore self-sufficient, and, because of that,in a position to contribute to stabilityand peacefUl works in this troubled world.

Mr. CLARK. I believe the Senator isquite correct. I think it is somewhatironic that in all likelihood-though Ihope I am wrong-some time next monthwe will vote, after very brief debate,without much consideration, on a totalmilitary budget of $82 billion to destroywealth and kill people; but when it comesto a compassionate act such as is repre­sented by this bill, we hesitate; and Ifear that the Senator's amendment maynot prevai:.

Mr. MONDALE. I thank the Senatorfrom Pennsylvania.

Mr. MOSS. Mr. President, will theSenator yield?

Mr. MONDALE. I am happy to yield tothe Senator from Utah.

Mr. MOSS. First, I wish to commendthe Senator for his thoughtfulness andcourage in offering this amendment toincrease the appropriation for foreignassistance, directing his discussion, atleast, toward the phase of foreign assist­ance which consists in helping othercountries become more self-sufficient infood, and pointing to the increased yieldof new seed. varieties,· classification. o.flands, application of fertilizers fitted tothe particular soil and climatic condi­tions, and these other matters.

I have at the desk, and hope to offerlater, an amend~ent which has muchthe same objectives as that of the Sena­tor from MiImesota.

Did I understand the Senator to saythat the Philippines, this year, would beself-sufficient in the production of rice?

Mr. MONDALE. Yes. This is the firstyear since 1903 that the Philippines havebeen self-SUfficient. Indeed, this yearthey are an exporting country for thefirst time since 1903.

Mr. MOSS. And that both India andPakistan have made phenomenal in­creases, percentagewise, in the amountsof grains that are produced in those twonutritiOn-deficient countries?

Mr. MONDALE. Yes. As a matter offact, Pakistan's wheat harvest this yearis 40 percent over their previous recordyear. Ceylon's rice crop is up 13 percent,and India's feed grain harvest is 12 per­cent above its highest previous level.

Mr. MOSS. And those are but ex­amples, I take it, of the beginnings of thisagricultural revolution that we havehelped to spark, and have been pressingso far, but which we are now retreatingfrom precipitously, at the very time whenit begins to bear the marks of success,when it begins to appear we are, indeed,moving the food-deficient countries ofthe world into a position where they canbegin to feed themselves?

Mr. MONDALE. That is correct; at thevery time when limited but wisely usedAmerican assistance could prod themalong and assist them in readling self­sufficiency in agricultural production. Atthat very point, we seem to be cuttingback on the effort. It seems, in my opin­ion, to be a very unwise po.Jicy, for whichI fear we may pay dearly.

Mr. MOSS. It has been our experience,

CONGRESSIONAL'RECORD -- SENATEI think, as anatfon-and I ask the Sena­tor's opinJon on thLs point-that whencountries are starving and hungry, there"is no possibility of stability; there is al­ways unrest, with a likelihood of somekind of conflict coming out of it, at whichpoint we seem to become involved oneway or the other, and usually expend alot of money either trying to give mili­tary assistance to neighbors who may beset upon, or, in some cases, even becom­ing directly involved with our own per-,sonne!. Is that not correct?

Mr. MONDALE. I would certainlyagree with the Senator's observation allthat point.

Mr. MOSS. The Senator's amendmentwould increase the appropriated figureby $200 million, is that correct?

Mr. MONDALE. The Senator is correct.Mr. MOSS. Would that make the total

any higher than it was last year?Mr. MONDALE. I am advised by the

stai! that it would not.Mr. MOSS. It would not be higher

than last year?Mr. MONDALE. No.Mr. MOSS. And, of course, would not

even approach the request of the ad­ministration for this year, is thatcorrect? '

Mr. MONDALE. The administrationrequested $765 million for developmentloans. If my amendment were agreed to,we would still be approximately $215million below the request of the ad­ministration.

If r may con'ed the answer to theprevious question, we would be above lastyear's appropliatioll of $435 million.

Mr. MOSS. I commend the Senator,and intend to vote for his amendment. Ithink it is time we opened our eyes tothe problem that confronts us. If assist­ing other countlies to get on their feetwa" a good policy following World Warn, when we first got into this programwith the Marshall plan, I think it is stilla good policy. Even though the type ofassistance shifts and the type of countryaided shifts, it still pays rich dividendsto have countries that are self-sufficientin food, and that possess economicviability, so they can exist and have adegree of independence, and help to builda world community in which we can allhope to live on this globe. I believe thatis the long-range objective of AID.

Obviously, we have to have priolities,and we have to measure the resultsagainst our ability as a nation to fur­nish the assistance. Does the Senatorhave any figure as to approximately howmuch of our gross national product wedevote to all foreign assistance?

Mr. MONDALE. I do not have a figure.It is less than 1 percent; and the currentautholization would be the lowest dollaramount in 20 years. As a percentage ofour ability, that is, as related to thegross national product of this country, Iam sure it is the least we have done inthe history of the foreign aid program.

Mr. MOSS. In other words, our par­ticipation is going down precipitously,both in absolute dollars and in percent­age of our ability to pay, based on ourgross national product?

Mr. MONDALE. Yes.Mr. MILLER. Mr. President, will the

Senator yield at that point?

Mr. MOSS. Let me finish this state­ment.

The Senator's reply that it is less than1 percent would make It far below theamount recommended by the United Na­tions?

Mr. MONDALE. Yes.Mr. ]l.o'IOS8. That the developed coun­

tries devote at least 1 percent of theirgross national product to the assistanceof underdeveloped and povelty-strickennations; so we are not measuring up onany of those tests, is that correct?

Mr. MONDALE. The Senator is cor­rect. The 1960's, as the Senator knows,was to be the decade of development.This was to be the decade in which thedeveloped nations of the world weregoing to take seriously and jointly theresponsibility of assisting and urging theunderdeveloped countries of the worldto seek programs of political and eco­nomic development that would makethemselves self-suffieient and indepen­dent.

We recognized that in order to do that,essential capital contribution would berequired from the developed and wealthynations of the world. A target of 1 per­cent was set as an appropriate contribu­tion that would be required.

Instead of that, we have, I think, con­verted the decade of the sixties into thedecade of disappointment and despair.

The developed countries have con­sistently reduced the percentage of con­tribution of capital we are making. Wehave consistently raised the interestrates we are charging. We have createda credit explosion by which much ofthe capital contribution is being offsetby repayments of principal and interest.)And I think the most ironic thing of allis that after more than 15 years of as­sistance in the food field, at the verytime when the possibilities exist for thesolution of the food-deficit problems,inthe ci:nmtries of Asia particularly, seemto be at hand, we seem to be reducingand eliminating our assistance in thisfield.

Mr. MOSS. I thank the Senator.Mr. MONDALE. Mr. President, r thank

the Senator for his leadership in thisfield. As he knows, I intend to SUPPOltthe Senator on his very importantamendment in the same area.

Mr. President, I made extended refer­ence to the remarkable article wlittenby Mr. Lester Brown appealing in theJuly 1968 issue of· Foreign Affairs. Thearticle is entitled "The AgriculturalRevolution in Asia."

Mr. President, I ask unanimous con­sent to have printed in the RECORD atthis point an article by Mr. Lester R.Brown, Administrator of USDA's Inter­national Agricultural Development Serv­ice, who is internationally recognized asan authority on the world food problemand agricultural development. I thinkevery Member of the Senate ought toread this article, because it details thene\\I food re\'olutio11 in the world.

However, the success of this revolutionin agriculture will not be achieved ifwe now cut off the foreign exchange sobadly needed by the developing nationsfor the purchase of fertilizer, seed, pes­ticides, and farm equipment, Passage of

this bill in its present form· will nearlycut off that assistance.

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

THE AGRICULT"C1lAL REVOLUTION IN ASIA

(By Lester R. Brown)For those whose thinking of AsIa is con­

ditioned by the food crises of 1965 and1966, the news of an agricultural revolutionmay come as a surprise. But the change andferment now evident In the Asian country­side stretching from Turkey to the Philip­pines, and including the pl"ota! countriesof India and Pakistan, cannot be describedas anything less. This rural revolution, large­ly obscured in its early years by the twoconsecutive failures of the monsoon, 15 fur­ther advanced In some countrles--Pakistan.the Philippmes and India-than in others,but there is little prospect that It will abort.so powerful and peI'vasive are the forcesbehind it.

That the agricultural revolution of theless developed world began In Asia is for­tunate, since it is both densely populatedand has a rapid. rate of population growth.In this respect, Asia 15 unique among theworld's major geographic regIons. WesternEurope is heavily popUlated but its popu­lation grows slowly; Latin America's popu­lation is expanding rapidly but as yet mostof the region is sparsely popUlated. Fifty­six percent of the world's 3,3 billion peoplelive in Asia; one-third of the world's popUla­tion, an estimated 1.1 billion, live in Asiaoutside China. It is this part of the worldand this third of mankind that this articledeals with.

lIistorically, as Asia's popUlation increased,it was supported by traditional agricultureon an ever-expanding area of cropland. Asthe postwar population explosion gainedmomentum in the late 1950s and early 1960s,the supply of new land was used up, but theproductivity of land under cultivation in­creased little. The result was a slowdown intlle rate of gain in food production and agrowing concern that popUlation growth andfood production were on a collision course.

The gravity of the situation came intofocus. as the monsoon on the Indian subcon­tinent failed two years running, in 1965 and,1966. The United States responded by ship­ping the equivalent of nearly one-fifth ofits wheat harvest, feeding sixty million In­dians for nearly two years. This record ship­ment, the largest ever between two countries,was sufficient to stave off famine.

As of mld-1968, both the food situationand foOd production prospects ·In Asia havechanged almost beyond belief. The Philip­pines is self-sufficient In its staple food, rice,for the first time sInce 1903. Iran, with asubstantial expansion in wheat acreage, isactually a net exporter of wheat tIlis year.Ceylon's rice harvest climbed 13 percentabove tIle previous record, as it both ex­panded the area under cultivation and raisedyields.

Pakistan's wheat crop, harvested in Apriland May, is estimated to be 30 percent abovethe previous record. So is India's. Tile totalIndian foodgraln crop, officially estimated at:LpO ml1lion tons, is up ·32 percent from lastyear's dl'ought-depreased levels and, moreimportantly, up 12 percent from the previousrecord. Good weather has helped boost theharvest on the Indian subcontinent this year,but increases above the previous record arelargely the results of solid technologicalprogress-more efficient varieties, more ferti-lizer and better farm practices. I

What has caused this remarkable turn­about? One factor is new political commit­ments at the top in several countries. Short­changing agricultllTe is no longer eitherteasible or fashionable. ThIs new politicalclimate has Jed to firm allocations of budg­etary and foreign-exchange resources. India,

July 30, 1968 CONGRESSIONAL RECORD - SENATE 24183for example, increased its budget for agricul­tural development by one-third in 1966-67;it is now using the equivalent of nearly one­fifth of its foreign-exchange earnings to im­port fertilizer and raw materials for manu­facturing fertilizer. Turkey's imports offertllizer may make up the largest single itemin overall imports this year, exceeding forthe first time petroleum and petroleum prod­ucts. TI:!e availability of fertilizer in Paki­stan is twice that of two years ago and sev­ernl times that of 1960; it is expected atleast to double again by 1970.

Many governments Which heretofore ne­glected agriculture have been encouraged togive agriculture a higher priority by the"short-tether" policy of the United States,whereby food-aid agreements are of shortduration and renewal depends on local ef­fort and performance. The overall scarcityof foodgrains, particUlarly rice, in manyAsian countries increased prices to the pointwhere it suddenly became very profitable forlarge numbers of farmers to use fertilizer andother modern inputs.

While some factors contributing to thetakeoff in agriculture are of recent origin,others have been long in the making. Theagricultural infrastructure is capable of sup­porting current advances because of severalyears of AID inveStment in farm-to-marketroads, in irrigation projects and in agriCUl­tural research and training. Investment inirrigation systems over the years providesa vast acreage of well-watered land, much ofit well suited to the intensive use of modernfarm techpology, Adequate supplies of waterand fertlllzer. are needed to attain highyields. The training of some 4,000 Asian ag­riculturists over the past decade, sponsoredjointly by AID, the U.S. Department of Agri­culture and the Land Grant Universities,contributes to a corps of trained profes­sionals capable of adapting and disseminat­ing new technology.

The availablllty of fertilizer has increasedseveralfold over the past decade, partly as aresult of expanding indigenous productionnnd partly because of steadily rising imports.The financing of fertilizer imports is now amajor AID activity, requiring a sizable por­tion of the agency's bUdget. Investment byfertilizer manufacturers and other support­ing industries· has helped to fuel the takeoffin agricultural production. Countries Inwhich U.S. firms have bullt or are bUildingfertilizer plants include South Korea, thePhllippines, Taiwan, India, Iran and Malay­sia. Fertilizer produced in these plants couldIncrease the region's annual food-producingcapability by an estimated 25 million tonsof grain. Other agrobusiness activities suchas the manufacture of pesticides and farmequipment are also contributing to the rapidgrowth in food production.

Perhaps the most exciting development isthe rapid spread of new, high-yielding varie­ties of cereals. The Mexican wheats nowproving so adaptable throughout Asia are theproduct of more than twenty years of workby the Rockefeller Foundation. Efficient newrice varieties are coming principally from theInternational Rice Research Institute in thePhilippines, an institution founded jointlyby the Rockefeller and Ford Foundations in1962 and devoted solely to the improvementof rice production in the tropics and sub­tropics. Work on high-·yielding varieties ofcorn, sorghum and millet is concentrated inIndia, where the Rockefeller Foundation isprO\'iding leadership for the program. Areasplanted to the new varieties went from a fewhundred acres in 1964-65 to about 23.000acres in 1965-66, nearly four milllon acres in1966-67 and over twentv million acres dur­ing 1967-68, the crop ye'ar just ended. Plansand expectations indicate a further expan­sion of up to forty million acres in thecoming year.

Several factors are responsible for thisrapid gain in acreage. The new varieties often

double yields of traditional varieties: theirsuperiority is so obvious that farmers arcqUickly persuaded of their merits. Tllis con­trasts sharply with impro\'ed varieties madeavailable in the past, which were only mar­ginally superior to varieties being used. An­other reason is the degree to which. the highyields attained on the experimental plots aretrrmsferable to field conditions. There arereports of instances in which farmers actual­ly attained higher yields under field condi­tions with large acreages than researchersdid on experimental plots. .,

The availability of these new seeds hasenabled many Asian countries to shorten ma­terially the agricultural development process.The importing of numerous varieties in smallquantities for testing purposes was in itselfan effort to achieve a shortcut; food-deficitcountries availed themselves of the resultsof plant-breeding work undertaken else­where. But they did not stop there. Once itwas demonstrated that a given high-yield­ing variety was adapted to local growing con­ditions, large tonnages of seed were imported,thus eliminating the several years requiredto mUltiply and accumulate sufficient sup­plies of seed locally.

Pakistan imported 42.000 tons of seedwheat from Mexico during 1967, enough toplant 1.5 mlllion acres. As a result, Pakistannow has enough seed to plant its entirewheat acreage to Mexican wheats. Indian im­ported 18,000 tons of Mexican wheats in1966. This, coupled with indigenous multi­plication of seed from the Initial introduc­tion of the same varieties, enabled Indianfarmers to plant 8 million acres this year~

the target acreage for 1970-71, and more thandouble the target of 3.5 million acres for thecurrent year. Turkey, starting later thanIndia or Pakistan but determined to catchup, imported 21,000 tons of high-yieldingWheat, inclUding some U.S. varieties, for useon a much smaller acreage. Both the importof samples of the new varieties initially, andthe larger shipments later, represent a mas­sive infusion of a new technology at anominal cost, wi th potentially Widespreadapplication. They constitute a Windfali gainin food production for many of the lessdeveloped countries.

The new varieties possess several distinc­tive characteristics. They are almost allshort-stemmed, so they can absorb largequantities of fertilizer without lodging (be­coming top-heavy and falling down); theyare much more responsive to fertilizer at alllevels of appllcation. A given amount of fer­t11izer produces a much greater increase inyield than with the older varieties of grain.And unlike high-yielding varieties of cerealsdeveloped in the United States or Japan forrather specific growing conditions, these va­rieties are adapted to a much broader rangeof latitudes.

The new varieties of rice are early matur­ing, ripening in 120 to 125 days comparedwith 150 to 180 days for the older varieties.They are also rather insensitive to the lengthof daylight and thus can be planted at anytime of the year if the prevailing tempera­ture and water supply permit. With adequatewater, some farmers in the Phillppines andIndia are harvesting two or even three cropseach year. Where water supplies are not suf­ficient to grow rice during the dry season.farmers grow high-yielding hybrid grainsorghums or hybrid corn. Triple-cropping ofrice, or rice in combination with sorghum orcorn. is resulting in yields under field condi­tions as high as 8 tons of grain per acre percalendar year. This contrasts with averageyearly rice }ields in Japan of just over 2 tonsper acre and wheat yields in Europe of lessthan 2 tons per acre. The introduction of theearly-maturing Mexican wheats in northernIndia and Pakistan is permitting the double­cropping of wheat and corn, with wheatgrovm during the rabi (winter) season andcorn during the kharij (summer) season.

II

Introduction of t.hc new varieties is chang­ing not only the technology of productionbut also the economics. The potentially far­reaching economic impllcations of the agri­cultural revolution are only now becomingclear. Projected demand for agricultural in­puts such as fertilizer, pesticides, water andirrigation equipment must be recalculated.Many of the assumptions underlying currentstrategies of agricultural development mustalso be reexamined. For example, in the shortrun, the profitabllity of using fertilizer "illincrease demand above what it would other­wise have been. Over the llonger run, how­ever, the demand for fertilizer may be lowerthan would otherwise be the case since asmaller amount of fertilizer will be requiredon the more responsive varieties to reach agiven level of production.

High rates of return on investments inproduction inputs, reflecting a more favor­able economic climate due to better pricesfor farm products and morc efficient newtechnologies, are mobilizing rural savings notpreviously available for production purposes.Investment is on the rise not only in thosethings which increase output in the shortrun, such as fertilizcr, but also in thosewhich boost food-producing capability overthe long run, such as tubewells and irriga­tion pumps. Over the course of five years,Pakistan! farmers in the cotton and rice­growing areas of the former Punjab, wherethe water table is quite near the surface,have installed some 32,000 private tUbewells,costing from $1,000 to $2,500 each. The valueof the supplementary irrigation made pos­sible by these wells is such that farmerscharacteristically have paid for them in twoyears. A large proportion were installed with­out government assistance or sUbsidy of anykind. The number of low-lift pumps installedin East Pakistan, totaling 2,200 in 1965, isexpected to increase to 14.000 by 1969, greatiyincreasing the potential for double-croppingrice during the dry season. Similar high ratesof return on small-scale irrigation invest­ments are reported in India, Where the num­ber of wells is also climbing at an astronom­ical rate.

Early-maturing varieties of rice whichripen during the monsoon require mechan­ical drying before storage, since the time­honored method of spreading rice in theroadside to dry is not feasible. The demandfor grain-drying eqUipment, now climbingrapidly, was not anticipated. SimHarly, theuse of pesticides, often uneconomic whenaverage rice yields were 1.000 to 1,500 poundsof milled rice per acre, is suddenly very prof­itable on the new varieties, averaging 3,000to 4,000 pounds. Growth in demand for bothpesticides and application equipment suchas knapsack sprayers and dusters "ill beclosely associated with the spread of the im­proved seed.

The new varieties. with their potential formultiple-cropping, place a premium on fastpreparation of the seedbed. Farmers plan­ning to double-crop or triple-crop their landmay no longer have several weeks to preparethe ground wit~ bullocks or water buffalo:they may have to lise power-driven farmequipment to prepare the seedbed qUicklyand plant the next crop. Eyen in some ccun­tries where new "arieties are not vet widelYspread. the profitability and feasibility (;ffarm n)eCh~lnjz?tjol1 are being ,increasinglyrecognized. In Thailancl. Where the move­ment of goods from farm to market is largelyby canal or river. rice fields are preparedprincipally by wa ter bu!fr,lo. Under these cir­c.unlstances. fa!"lners are discol:ering it is1110re economical to hire someone Vv"ith atractor to plow the rice fields for a few dol­lars per acre than to feed and care for ateam of water buffalo all year just to usethem during a fe\, weeks at plowing time.Some 20.000 to 25,000 imported tractorsplOWed an estimated one-fourth of the rice

241M CONGRESSIONAL RECORD- SENATEacreage thJs past year, mostly on a custom­hire bas1&-not unllke the way in whichwhea.t 1a harvested In the Great Plains of theUnlted states.

The more intensive farming methods asso­ciated With the new technology require morefarm labor. The new varieties Will not re­spond to the traditional practice of plantingthe crop and then virtually forgetting ituntil harvest time. Substantial amotmts ofadditional labor must be invested In apply­ing fertilizer, weeding and the like. Expan­sion of the area that can be mUltiple-croppedis also resulting in a more effective use of therural labor supply, particularly during thedry season. In Asia, where underemployedlabor constitutes one of the world's largestunderutillzed resources, this promlses a ma­jor economic gain. For the first time, thereis the possibility of significant labor scarcitiesin localized rural areas.

lIT

Changes associated With the new farmtechnology have a social as well as an eco­nomic impact. The exciting new cereal vari­eties are so superior to the traditional vari­eties and so dramatic In theIr impact thatthey are becomIng "engines of change" wher­ever used. They may be to the agrIculturalrevolution in Asia what the steam engine wasto the Industrial revolution In Europe.

Successful adoption of the new seed re­quires the simultaneous adoption of new cul­tural practices and the use of modern inputs.The seasonal rhythm of rural activity, oncedetermined largely by the monsoon, is chang­ing as farmers begin to double-crop and toIntroduce new combinations of crops. Farm­ers takIng advantage of the new technologymust enter the market; they cannot remainsubsistence farmers. Rural Asians will changeand innovate-when it is to their advantageto d,o so. Significantly, there may be somespin-otr from thIs breakthrough In agrIcul­ture, this Initial break with tl·adltion. Famllyplanners should take heart. As farmers learnthat they can indeed Infiuence their destIny,they may become much more susceptible tofamlly planning and other equa.lly "radical"departures.

Not all changes wrought by the new tech­nology are desirable. In some areas, tenantsare being reduced to farm laborers as land­owners discover the profitability of the neWtechnology In the current economic settIng.Even though income to the landless may rise,the socIoeconomic gap between the landown­ers and the landless may Widen. DissIdentsamong the landless group in some states ihIndia now form the nucleus Of the oppositionpartIes. Among those Who own land, the in­come gap between those owning fertile, well­watered land and those wIth marginal landis also likely to widen. Whlle many of theformer may easily triple or quadruple output,the latter may not be able to employ the newtechnology at all. Those who can, and arethus permltted to enter the market, are likelyto become more vocal and more Interested ininfluencing the economic policies affectingtheir fortunes in the marketplace. Politicalactlvization of rill'al popUlations Is an ex­pected concomitant of the agrIcultural revo­lution now under way.

The leadershIp in most Asian countriesis not unaware Of the political implicationsof recent changes in rural areas. Prime Min­Ister Demirel of Turkey feels strongly enoughabout the crash program In wheat produc­tion, initiated at his behest less than twoye,\rs ago, to have it directed and monitoredfrom his office. Some observers think Presi­dent Marcos of the Philippines, who hasbrought his country to self-sufficiency in riceby emphasizIng rural development, may bethe first President of the Phll1pplnes everto be reelected to office. Former PrIme Min­ister Maiwandwal of Afghanistan was so Im­pressed with the production potential of theMexican wheats and with the urgent need toarrest AfgliAnistall's gr9wlng dependence on

imported Wheat that he assessed each of theMinistries 2.5 percent of its current year'sdevelopment bUdget to create a fund tolaunch an accelerated wheat-productionprogram. Two years later, the Afghans ap­pear to be progressing toward their goal ofself-sufficiency in Wheat. President Ayub of,Pakistan shows a deep personal interest inthe agricultural programs under way In hiscountry and follows their progress on analmost daily basis. India's progressive C. Sub­ramanlam, former Food and AgricultureMinister, took ad"antage of the food crisisto mobilize suppcrt for and launch the ac­celerated food-production effort responsiblefor much of India's gains.

Recent agriCUltural progress should notgive cause for complacency. Many difficultprOblems lie ahead, especially in the fields offarm credIt, water development, plant dis­ease, foreign-exchange availability, market­ing and price incentives.

Purchases Of farm inputs are often con­centrated Initially among the larger farmerswho are able to finance their own purchases.The rate at Which small farmers adopt newtechnologies is frequentiy determined bythe ll.vailabllity of farm credit on reasonableterms. If, llke the great majority of AsIanfarmers, they are dependent on the locaimoneylender fcr credIt, often at Interestrates ranging from 20 to 100 percent peryear, they may not find it profitable to usemodern inputs such as fertilizer. Availableevidence indicates that fertilizer distribu­tIon In some parts of India and West Paki­stan 1a beginning to slow because of a lackof credit.

IntensIve cultivation of the new hlgh­yielding varieties requires, In addi tion to anadequate supply of water, a far more so­phisticated system of water control andmanagement. At present not more than one­third of Asia's rice land Is considered suit­able for the new, short-stemmed rice vari­etIes. Excessive and erratic fiooding duringthe moonsoon or rainy season is not con­ducIve to the intensIve cultivatioI:\ of rice,which requires hand-weeding and the use offertilizer and pesticides. Either too lIttle ortoo much water can be damagIng.

Associated With the massive introductionof exogenous varIeties Is the risk that somelocal Insect or disease could suddenly Wipeout the entIre acreage, thus creating possiblefamine not unlike that occurring in Irelandmore than a century ago. The worst of thisthreat may have passed, however, for thenumber of new varieties has already reduceddependence on any single one. Each year thatpasses should make the threat lessdangerous.

RIce production during the dry season,once limited by the lack of varieties adaptedto the off season, Is now limited by a lack ofwater. This can be remedied either by devel­oping underground water resources, Whichare quIte abundant in some areas, orby usingpumps to lift water from the numerous riversand canals that fiow through many of therice-growing areas during the dry season.The exploitation of unused water resottrceswlll expand the acreage suitable for plantingthe high-yielding rices. Few, if any, develop­ing countries arc endowed with all the rawmaterials needed for manufacttlre of cpemI­cal fertllizers-pllospllate rock, potash,sulfur and natural gas or naphtha. As the useof fertilizer expands, many countries, chroni­cally faced with a scarcity of foreign ex­Change, are hard pressed to find enough hardcurrency for the required imports. For someindividual countries, such as India, thIsscarcity of foreign exchange could effectivelyreduce the rate of agricultural progress.

Frustrating though these problems may be,the domInant constraint on agriculturalgrowth is llkely to be Inadequate marketingsystems and an overall lack of markets. ThereCellt emphasis Oll agriculr.ural developmenthas been concentrated on the e:<pansion Of

production; marketing has been1argely ne­giected, with the result tha.t some of theprom1aing gains made In production may benegated. Over the past decade many of Asia'slarge coastal cities-Karachi, Bombay, Ma­dras, Calcutta, Colombo and Djakarta-havebecome increasIngly dependent on importedfoodgrains. To become self-sufficIent requiresnot only producing a surplus in the country­side SUfficient to feed these clties, but alsohaving a marketing system capable of movingrural surpluses to the cities when needed.This means farm-to-market roads, storage fa­cilities and a market-intelligence system torationalize the movement of commodities.

Several Asian countries, such as Pakistan,the Philippines and Turkey, could produceexportable surpluses of grain withIn the nextfew years, joIning Thailand and Bltrma. Ifthey do, they must develop the transportand storage faclllties needed to move poten­tially large surpluses of grain from often re­mote rural areas Into world markets. If ex­portable surpluses develop, there wlll bemounting pressure on Japan and the EECcountries-where cereal prodtlction is oftensubsidized at prIces double the world marketprice-to reduce subsIdies and permIt Im­ports.

Problem areas notwithstanding, an agri­cultural revolution Is under way in Asia. Thenew cereal varieties provides a. means for tap­ping some of the vast, but as yet largely un­realized, food-producing potentIal of thetropics and subtroplcs. putting them on amore competitive footing wIth the temper­ate-zone cereal producers. The agriCUlturalbreakthrough occulring in several majorAsian countries can be repeated in LatInAmerica and Africa. Mexico, Which once de­pended on import!> for nearly half Its wheatneeds, 1a now exporting small quantitIes ofboth wheat and corn. Kenya, untll recently afood-aid recipIent, has produced an export­able surplus of corn, its food staple. Tunisiaand Morocco are introduclng the Mexicanwlleats. Much of the technology now beingapplled In Asia Will also be appIled in bothLatin America and Africa, if the necessarytop-level politicai support and proper com­bination of economIc pollclell are forth­coming.

The farm sector now constitutes from 'one­thIrd to one-half of most AsIan economics.It is conceivable that the 2 percent rate ofincrease in food production prevalling dur­ing the early and mld-1960s could accelerateto 4 or 5 percent yearly over the next fewyears, provided markets can absorb the addI­tional output. The additional purchasingpower thus generated for both productionand consumer goods will lit1mulate a morerapid rate of growth In the non-fal"In sector.The net effect shOUld be a much more rapidrate of overall economic growth than wouldotherwise have prevailed. If the Asian agrI­cultural 'revolution continues, It could wellbecome the most significant world economicdevelopment sInce the economic rebirth ofEurope follOWing World War II.

Th1a agricultural revolution is not the ulti­mate solution to the food-population prob­lem, but it does bUy some much needed addi­tional time in which to mount effectivefamily-planning programs. If food licarcltylessens as anticipated in some of the majorfood-deficit countries, governments recentlypreoccupied with real or impending foodcrises can agaIn turn their attention to"thebusiness of development. Altliough the needfor food aid is likely to lessen !lharply withinthe next few years, capital needed for in­vestment in the agriCUltural Infrastructureis certain to increase. The need for technicalassistance seems likely to rIse as the prob­lems generated by dynamic movement inagrIculture increase. The need for foreignprivate investment in agrobusiness will alsorise sharply as farmers clamor for the Inputstil~y need to take full adl'antage of the newgenetic potentials available to them.

July 30, 1968 CONGRESSIONAL RECORD - SENATE 24185The posiUye economic effects of an agri­

cultm'al takeoff in Asian countries are quiteevident. What is not 1;0 readlly realized isthat it will bolster the confidence of nationallea.ders in their ability to handle other seem­ingly insoluble problems. It may alsostrengthen their faith in modern technologyand its potential for improying the well­being of their people.

Mr. MILLER. Mr. President, will theSenator yield?

Mr. MOSS. I yield.Mr. MILLER. Mr. President, I wanted

to make a point in connection with thequestion of the Senator from Utah andthe response of the Senator from Min­nesota about the proportion of the grossnational product and the possibility thatour proportion is going down rather thanup.

I do not have the precise percentage,but I think that where we may be delhl­quent in analyzing the answer to thequestion is that we are talking only aboutthe foreign aid bill. However, this is onlya part of our foreign aid program.

The Senator from Utah should takeinto account the fact that in addition towhat is contained in the pending bill,the taxpayers of our country are puttingup $1 b1Ilion in foreign aid for SouthVietnam and almost $2 billion in thefood-far-peace program, neither of whichprograms were in existence 10 or 20 yearsago. So, if we take into account the totalpackage of foreign aid that the taxpayersof our country are putting up-what isin the foreign aid bill and what is inforeign aid in a separate bill to Vietnamand what is in a separate bill for the food­for-peace program-then I do not thinkthat we should be too apologetic, especial­ly at a time when we have a war on ourhands.

I have fallen into this error myself onprevious occasions. And I know of somany others who do the same thing.When a foreign-aid b1ll is being consid­ered, they think, then, in terms of italone, but we must also take into accountall of the other things that the taxpayersof our country are putting up. And thatcomes close to $3 billion a year at thistime.

Mr. MOSS. Mr. President, if I may re­spond, I appreciate the comments of theSenator from Iowa. And, of course, whathe states is a fact, that there are otherareas where we are utilizing tax funds inforeign assistance. However, I point outthat food for peace is a humanitarianstop-gap type of assistance to preventhunger and starvation and to enable usto get through the current crisis, where­as what the Senator from Minnesota istalking about is assistance to countriesso that they can produce their own foodand then we will not be called upon tocome to their aid with food for peace.

We are generally a humanitariancountry. And if we find people that arehungry, we usually try to get food tothem. This is a commendable thing.r~owever, how much better than tryingto rush food to them it would be if wec::mld bring those cor.ntries to a positionin which they could produce their ownbod.

This is what is coming about, as theSenator from Minnesota has said, fromthe development of these new seeds, new

strains, disease resistant, fertilizer, andthe other many improYements, so thatwe have made some very dramatic ad­vances in the last few days.

At this time, it would seem to be fool­hardy to turn back rather than to con­tinue with our advance.

Mr. MILLER. Mr. President, the Sena­tor's point is well taken about the natureof the foreign aid program. However, itshould be brought out that when we starttalking about assistance to other nationsof the world in terms of our gross na­tional product, we had better take intoaccount all of the money that the tax­payers of our country are putting out.And 8 or 10 years ago, nothing was goingto Vietnam to speak of and nothing wasgoing into the food-for-peace program tospeak of.

We now have about a $3-billion-a-yearpackage in those two items alone.

I concur on the point that it is muchbetter to help them with the necessaryfood production so that we do not haveto send them food for peace. And that hasbeen the policy of Congress for quite sometime.

I do not hear any argument about that.Certainly I am not going to differ withmy colleague, the Senator from Utah, onthat point. That is just common horse­sense.

I want to put the record inperspec­tive because the Senator from Utahasked a question which is on the mindsof a lot of people today.

I make the further observation that wehave a $25-billion-a-year war burden onour back. And at this time, I do not thinkthe American taxpayers can properly beexpected to put up as much foreign as­sistance as they would otherwise be ableand willing and happy to do so.

I thank the Senator from Minnesotafor yielding.

Mr. MONDALE. Mr. President. we arenot talking here about idealistic, human­itarian aid programs. We are talkingabout our own national security, and theextent to which a starving world­famine and strife-lidden-threatens thepeace of all mankind.

We are not talking, either, about vastgiveaway programs, or about U.S. fundsbeing squandered for frivolous projects ofnational self-glorification. We are talk­ing here about funds which are used bydeveloping nations to buy fertilizer andseed and farm equipment in the UnitedStates.

The present authorization level in thebill is $350 million. I think we ought tolook at a few examples of the agricul­tural needs which will not be met at thislow level.

India alone is scheduled to receive $408million of development loans in fiscalyear 1969. Two hlll1dred million dollarsof this will be used to import fertilizerfrom the United States. Twenty milliondollars will be used to import better seedvarieties and pesticides from the UnitedStates. Fifteen million dollars will beused to help finance a new cooperativefeltilizer plant in India.

Pakistan would have been able to use$177 million for development loans in fis­cal year 1969, a substantial portion ofwhich would go for U.S.-purchased fer­tilizer imports.

Turkey and other nations will alsosuffer reductions in funds for agricul­tural self-help and development.

It seems to me that this reduction isshortsighted and unnecessary. It seemsto me that one of the best investmentswe can make in foreign aid is one whichwill help food-deficit nations reach agli­cultural self-sufficiency, eliminating thecost and expense of huge shipments offood to alleviate the inevitable starva­tion that will result if the agriculturalrevolution fails.

Therefore, Mr. Presid£:nt,4 I offer anamendment which will provide an addi­tional $200 million authorization to thedevelopment loan fund specifically tiedto agricultw'al development policies andprograms. It would provide the addi­tional money only for financing the im­port by the United States into less-de­veloped nations of fertilizer, seed, pesti­cides, and farm equipment and sup­plies-particularly those countries whichhave shown such promising agriCUlturalgains in the past few years. Many ofthese countries have devoted increasedportions of their national resow'ces toagliculture, and we simply ought to en­courage them to continue to do this.

Mr. MORSE. Mr. President, I rise tospeak on another part of the pendingbill.

The amendment of the Senator fromMinnesota requires considerable debateon the tloor of the Senate and a largeattendance in the Senate. I shall speakabout it at a later time.

Mr. President, we need a substantialconsideration of this amendment. I haveto go to conference on the education leg­islation. I have agreed with the leader­ship that I would make my speech in be­half of another section of the bill. There­fore, I shall proceed to do that at thistime.

Mr. President, the log export amend­ment added to this bill upon my motionin committee is not, contrary to press re­ports, a protectionist lider; nor is it ex­traneous to the foreign aid bill.

The amendment is cosponsored bySenators MANSFIELD, METCALF, JORDAN ofIdaho, CHURCH, Moss, and HATFIELD, inaddition to my authorship of theamendment.

It is certainly unfortunate that man­agement of the public lands has becomethe business of the State and CommerceDepartments, the Treasury, and the Bu­reau of the Budget, But it was these agen­cies that made this a foreign policy is­sue, not 1.

Even more do I regret that the Depart­ments of Agriculture and Interior allowedthese other departments to make deci­sions that Congress vested solely in tl1eSecretaries of Agriculture and Interior.Members of Congress and their staffswere told by the Secretary of Agricult.ureon July 11 that it did not matter whatstatute his determination concenling logexports was based upon. because the au­thority given him was all discretionary,anyway, and the decision would be madein concert with the entire administra­tion and not upon his judgment alone,

I cannot believe that any of these ex­ecutive officials has read the law. Thestatute of 1926 calls upon only one per­son to judge only one thing: It calls upon

24186 CONGRESSIONAL RECORD - SENATE

the Secretary of Agricultul'e to judgewhether the supply of timbel' fol' localuse will be endangered if some of thetimbel' is exported. That is the only oneand only judgment the Secretary has tomake. That is the mandate of Congress.

No discretion is called for concerningthe relationship of log exports to balanceof pay·ment,,; nor how to offset the hun­dreds of millions of dollars worth of U.S.military procurement in .Japan; nor whatthe reaction of Japan may be if the lawsgoverning the pUblicly owned Americantimber are enforced. Neither is any judg­ment upon these matters vested in someother department or executive official. Iquote the act of April 12. 1926:

That timber lawfully ellt on any nationalforest, or On the pUblic lands In Alaska, maybe exported from the state or territory wheregrown if, in the judgment of the Secretaryof the department administering the nationalforests, or the pubiic lands in Alaska, thesupply of timber for local use will not beendangered thereby.

But since public land manar,ement hasbeen constl'ued as an instrument of for­eign policy by this administration, Con­gress must deal with it in those terms,too. The Committee on Foreign Relationshas wisely done so with this amendmentto the foreign aid bill.

I may say again that this is not myamendment alone. It is cosponsored bymy colleague from Oregon [Mr. HAT­FIELD], by the Senators from Montana[Mr. MANSFIELD and Mr. METCALF], bythe Senators from Idaho [Mr. CHURCHand Mr. JORDAN], and by the Senatorfrom Utah [Mr. Mossl.AMENDMENT EXPANDS RATHF,U'TH.\N CONSTR1C'rs

F.XPOUTS

1"ar from being aiprotectionist meas­ure, it permits an exclusion of 350 mil­lion board feet per year f!'Om the 1926law that now forbids the export of anynational forest timber unless and until itis shown to be surplus to local needs, Inour hearings, the testimony of tht~ repre­sentatives of this Government is thatthis timber is not in surplus.

It should be remembered that underthis same statute, our Govenlment,through the Department of Agricultureand the Department of the Interior, haslong forbidden the export of any logsfrom Alaska. It should be rememberedthat OUl' neighbor to the north, Canada,has for years prohibited the export oflogs from that country. It recognized thatthe logs are harvested on the people'sforests.

These forests do not belong to thisadministration. They do not belong tothe people of the State in which they arelocated. They belong to the people of allthe States. They are a treasure house ofa great natural resourc~, and e-.ach gel1­C!'ation has a trusteeship obligation to seeto it that those forests are so scientificallYmanaged under a sustained yield pro­gram that th,ey will guarantee in per­petUity to the American people an ade­quate supply of wood products.

That is our national forest system intbis country.

One of tlle great founders of our con­s~l'Vationprogram, the former Governor,-,fPennsYlvania, now long dead, thegreat. Gifford t!inchot, must l'iave re­\'Jlved inhi~tgt'lwe \\"heli the policy was·

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started of making our national fOl'estsinto tree farms of Japan. Those fOl'estsare not maintained for the benefit of theJapanese people. They are maintainedfor the benefit of the American people.As has been brought out in our hearingsbefore the Subcommittee on Small Busi­ness. those forests are not negotiablewith any foreign government. Thoseforests belong to the people, to be pre­served and managed in the interests ofthe American people, not in the in­terests of people of foreign lands. Butsince public land has been made an in­strument of foreign policy. it must bedealt with in this bill.

Prior to 1926, a law of 1897 forbade theexport of any timber from the nationalforests. In 1926, a permanent statute al­lowed such export where surplus wasshewn. It was in that law of 1897 thatthe national forests of the Nation werecreated, to maintain a perpetual supplyof timber for the people of the UnitedStates. Least of all do these statutes leaveany impression that, national forestsshould be managed as a commodity to besold off to the highest foreign bidder forbalance-of-payment considerations. Ifthis were to be their greatest use andvalue, then by all means the nationalforests should be abolished and sold toprivate enterprise. Private companiescould undoubtedly sell it off abroadfaster and at highel' prices than can theForest Service or the Bureau of LandManagement.

Because lack of enforcement has per­mitted foreign purchase of public timberin the approximate amount of 350 mil­lion board feet annually, my amendmentwould make that figure an exclusionfrom the requirements of the 1926 act.For 5 years, 350 million board feet couldbe sold Jor export t'rom public lands, inaddition to the amount and species foundto be surplus to local needs.

Senators should bear in mind that cer­tain species of timber have little or nomarketable value in the United Statesbut. are desirable in foreign markets.Among those I can mention is Port Or­ford cedar. It has practically no market­able value in the United States. andtherefore it is surplus to our needs. Con­sequently, it should be considered ex­portable, and it has been exported formany years. There are other species.Within the family of hemlock are speciesthat have no marketable value in theUnited States, but there is a demand forthem elsewhere. and therefore it is ex­portable.

For these reasons, I do not believe anycase can or should be made that theamendment would damage our presentbalance-or-payments position with Ja­pan. the chief purchaser of these logs. Tothe contrary, once we make it eminentlyclear with this language that we meanto process our own public timber, I thinkJapan will come to see that her growingneed for wood fiber can be met by buy­ing American lumber products, just asJapan nO\\' buys Canadian and Alaskanlumber products because she can buy fewof their logs.

In this connection, there has been somediscussion in the lumber industry in theNorthwest of whether U.S. mills are ac­tually prepared to go into export trade

in finished lumber. In the past, we havenot sought the export trade, nor have weentered the Japanese market to any ex­tent because Japanese trading companieslimit foreign competition in finishedwood products.

If anyone thinks there is an open-cloorlumber and log trade policy between theUnited States and Japan, he could not bemore wrong. When you seek to ship woodproducts into Japan, you have to gothrough a tightly controlled domesticmarket, sometimes labeled a cartel sys­tem. I call it a controlled market system.Trading companies determine whatgoods in Japan, usually at a great mark­up for themselves. The actual price com­petition is not great.

But the question has arisen of whetherwe could furnish wood products to Japan.

The Caffall Brothers Forest ProductsCO. of Portland, Oreg., has written to meabout this very matter. Its presidentcomplained that he was unable to fill anorder sought by Japan for half a millionboard feet of 4 by 4's. On July 24, I re­ceived another letter from Mr. Caffall,which I quote in full:

DEAR SENATOR MORSE: On July 18, 1968, wesent you ll. copy of a letter which we trans­mitted to the Mitsui Co., documenting thcresults of a recent inquiry from Japan forlumber. The letter qUite clearly demon­strated the unwllllngness of many local milloperators to try to find an equitable solutionto this log-lumber export problem.

We now feel in all fairness that we mustinform yon that subsequent to the first writ­ing we have been able to effect a firm con­tract on 500,000 feet of 4 x 4's with the Port­land Lumber Mill division of the Brand SCorporation. Mr. Brandis Is a long-time asso­ciate of our company and is probably betterinformed on the export problcm than mostoperators. The price Which we were able tooffer Mitsui was not as low as some of theCanadian offers but It was substantiallyunder the quotations received from mostother mills.

Mr. Brandis, I am sure, does not intenel tolose money on the long term. He has, how­ever, demonstrated that he Is not wllling tosit complacently by and watch Canada ab­sorb this market. This type of mutual co­operation and knowledge of world markets isabsolutely necessary if the American woodproducts Industry Is to survive in IntefllU­lional commerce.

very trUly yours.CAFFALL BROS. FOREST PRODUCTS, INC.

C. C. CAFFALL.

Certainly the lumber industry of theNorthwest is on the right track when itmeets the demands for export, and Isalute Mr. Jack Brandis for his fore­sight and economic statesmanship.

It will take some time for U.S. mills tochange their dimensions and other pro­duction practices. But it is also true thatso long as Japan can obtain logs, shewill buy the logs and not the lumber.Firm and substantial orders for finishedlumber will make it possible and prac­tical for U.S. mills to fill the orders, oncethey can get the logs. And there is con­siderably more balance-of-payment ad­vantage to us from the sale of lumberthan from the sale of raw logs.DOMESTIC SUPPLY OF LUMBER ALSO AFFECTED

A curb on log exports will also have abeneficial effect upon the supply of lum­ber for domestic consumption. The con­stricted supply of logs due to exports is

July 30, 1968 CONGRESSIONAL RECORD - SENATE 24187pushing lumber prices for domestichomebuilding to levels far above normalprice increases. Testimony taken at ourJuly 19 hearing shows that the wholesalesoftwood lumber price index has shot upfar in excess of the increase of housingstarts.

The reason is the tight supply of tim­ber in the Northwest due to exports, andthe high prices of timber due to Japa­nese bidding. Our January hearing re­cord is replete with statistics of millsclosed down in the Pacific Northwest torlack of logs, mills that cannot be broughtback into production quickly, if at all,for they could not process the logs at aprofit and pay the price the Japanesewere willing to pay for those logs.

The sad fact is that this public timberso urgently needed to build homes forAmericans has been put up for foreignsale for balance-of-payments reasons. InApril, the Department of Agriculturetook steps to limit that sale on forestswest of the Cascades in Oregon andWashington. The 350 million board feetexclusion was applied there for 1 year.That action was welcome, for it providedtemporary relief for the mills dependentupon public timber for their operation.But it was not a long-range solution, andit did not cover enough geographically.

It is a long-range solution that theamendment now proposes to solve. Keepin mind that the Federal Governmentowns 63 percent of the commercial forestland in the 12 Westem States. Keep inmind that the Federal Government owns\50 percent of the land area of my State.Many people in the Midwest and in theEast do not know what it means to livein a State where the Federal Govern­ment has ownership of more than 50percent of the land area of the State.The implications of that situation pressdown upon us on one issue after anotherthat come before the Congress. We haveto have a considerable amount of Fed­eral activity, and in a variety of legis­lative forms, to meet the deep problemsthat confront Oregon and other West­ern States.

Mr. President, that is why you find meseeking to make this record as to thepurposes, objectives, and results of thissection of the foreign aid bilL

Keep in mind that there will be an esti­mated demand for 2 million new homesa year in 1970, and 2.5 million by 1980.That means a demand for lumber of16.8billion board feet in 1970 and 21.6 billionby 1980.

Under present management practiceson the public lands, there simply willnot be logs available to local mills in theNorthwest to meet that demand, if logexports continue to be unlimited.

As to the foreign policy implications, Ia.ppreciate that the State Department isalways concerned when trade changesare involved. Japan has a great need forhousing. She has put great amounts ofcapital into constructing new sa·wmills.They are based upon water transporta­tion, and are highly efficient. But to theextent that this investment was predi­cated upon the assumption that Japancould buy unlimited quantities of logsfrom the publicly owned forests of theNorthwestem United States, the State

Department has no one t.o blame butitself.

In fact, we pol...ted out in our hearingssome months ago and again the otherday, that it would be very wise in the in­terest of foreign trade if Japan wouldturn to other countries to get their legs,if they have them in surplus, instead ofthreatening us, as some do, that if we donot sell them logs, they will buy fromRussia. As I said in the hearings, "God­speed, buy them from Russia." 1 am notsure that wOl:ld not be a very desirablething in helping the economy of bothJapan and Russia. But 1 do not intend tostand by and have Japan do irreparabledamage to the economy of my State, asher log purchasing practices have done.

Thousands of jobs have been lost andgreat productive wealth destroyed. As faras the balance-of-payments problem isconcerned, those in the Bureau of theBUdget, the Department of Commerce,tile Treasill'Y Department, and the StateDepartment need to do a little simplearithmetic. If they would do that., itshould not take them very long to cometo the obvious understanding that if youtake American logs and proceS8 them inAmelican mills and till'n them into morevaluable products, such as finished lum­ber, and sell the finished product, youhave increased manifold the benefit to usin balance of payments. Selling the -rawlogs compared to the value of finishedlumber shows the damage being done inconnection with the balance-of-pay­ments problem.

Let Japan buy from us finished lumberas she buys from Canada and Alaska.The only reason she buys it there is 8hecannot buy logs in Canada and Ala8ka.It is that simple.

Japan. too, has great need for housing,and I recognize thll,t. But she can get thelumber for the housing if she wants tobuy it from us or she can go elsewhereand get the logs.

Our Government's representatives inJapan knew-or should have known­what the statute said. They have no rightto let Japan go on believing she couldtake all the timber she wanted off theAmerican national forests.

FUTURE SUPPLY NEEDS TO BE STUDIED

The great paradox in this picture isthe fact that there is, indeed, a tremen­dous supply of timber in the PacificNorthwest. There is an even greater po­tential for increased production in thefutw·e. if we farm these forests scien­tifically. Do not forget, Mr. President,when YOU look on forests s'ou look ontree farms. When you look on nationalforests you look upon great preserves offorests to be harvested when they areright for harvest, and that is what wemean by sustained yield program. Butthe hanest should be for the benefit o{the economy of the United States andnot the economy of Japan or any otherforeign power.

The same Budget Bw'eau that pushestIle sale of these logs for balance-of­payments reasons also presides over acut of $21 million in the budget of theForest Service for fiscal year 1968. Thatcut means that timber that could be cutwill remain inaccessible.

For the local mill operator who must

have a raw material on hand this week,this month, and this year, those treesmay as well not be there if he canno tget to them to cut. The same is true ofthe logger who might wish to cut logsfor export to Japan.

That is why 1, for many, many reasons,voted against the tax increase. It wascoupled with a $6 billion budget cut,much of it to come out of resource man­agement to the detriment of the eco­nomic welfare of the American taxpayer.

So, when we had the Director of theForest Service, Mr. Cliff, on the witnessstand, 1 asked him about the $21 millioncut from the 1968 appropriated funds.We are talking now about the funds thatwere appropriated by Congress and theadministration impounded a substantialpercentage of those funds. It impounded$21 million out of the Forest service.Read the testimony of the Director of theForest Service, under my examination,and that of other members of the com­mittee. He pointed out that some of thecuts would come out of access roads.

The record will show that I said tohim, "1 realize you are on the team andyou are going to have to carry out theorders of the White House, but I want topoint out that for every dollar the ad­ministration thinks it is saving on accessroads. it will be a loss to the Americanpeople of $10 for every alleged dollarsaved."

Here is an investment in access roadsfor production. Without those accessroads, we cannot get the timber out.Without those access roads, we cannotget the timber out that Is ripe and whichshould be cut now in the best interestsof a healthy forest.

Thus, 1 want to point out that wenot only do not have any surplus of logsbut we have a shortage of logs becausethe mills in the West are not get,tingfrom the public forest the supply oftimber they need in order to meet theirfull operational capacity, or to supplythe timber needed for domestic supply.

The meaningful timber supply we aretalking about now is what is put up forbid. With Japanese bidding for theirsheltered market, and American millsbidding to meet the demand for lumberhere at home, prices are booming onpublic timber sales-far above the ap­praised value. Do not forget how thebids work. The Forest Service or theBureau of Land Management appraisesthe timber and places an appraised priceon the timber. They testify that that ap­praised value is the value of the timber,but because there is such need for tim­ber, the lumber companies find it neces­sary to bid high above the appraisedvalue of the timber. That is one of thereasons why our lumber prices are sohigh. The cost of construction of housesis therefcre higher than it should be orneed be.

\Ve han; the Japanese coming in-andthe record of the hearings is very clear.in many instances-and they will bid$125 to $150 for a thousand board feetof timber when the regular market pricewould be from $60 to $85 for that timber.That is the kind of competition-thiseconomic invasion by Japan of the peo­ple's forest-our mills have to contendwith in the national forest areas.

CONGRESSIONAL RECORD -··SENATE

That Is why the evidence shows theyare shutting down, men are being thrownout of \",ork, or have been thrO\vn out ofwork for the past several years, as thisproblem has accumulated and accumu­lated until it !1as reached this crisiscondition.

But the amount of timber for sale ont!1e open market remains relativelyfixed, due in large part to shortsightedBudget Bureau practices. I say short­sighted Budget Bureau practices, be­cause the allowable cuts cannot be ex­panded without access roads, withoutcruisers, or appraisers, or personnel. Thesituation is made much worse when, inaddition to this, the Government vio­lates the law of 1926, as I have explainedearlier in the speech, by sellirig logsthat are not surplus.

It is my conviction that a maior taskfor the 91st Congress is a total reevalu­ation of the management and develop­ment of the public timber resource,with a view to increasing its yield. The5-year application of my amendmentwill give US time to make such a study.It will keep American lumber mills inproduction in the meantime.

TERMS OF AMENDMENT

Turning to the language of theamendment which was adopted by theCommittee on Foreign Relations by avote of 11 to 4 the first sentence providesan exclusion of 350 million board feetthat may be sold for export each year,without regard for the requirements ofthe 1926 act. This will permit approxi­mately the present level of export tocontinue.

Paragraph (bl is intended to restateand make mdre specific the requirementof the 1926 act that unprocessed timberabove and beyond 350 million board feetmust be found to be surplus befol'l~ itmay be offered for export. The 1926 actsupposedly requires this finding. Butwhereas the regulation under which saleshave been made appeared in the FederalRegister in 1948, I am unable to :tlnd thatany subsequent determination has beenmade. The general counsel to the Depart­ment of Agriculture has said that thisregulation constitutes a "continuingjudgment" that logs are in surplus. Butupon what evidence or what record thatfinding and judgment are based are to­tally unknown to me, to the industry, andI suspect to the officials who administerthe law.

Certainly that judgment does not con­form with conditions that have prevailedin the industry for some time. No evi­dence or record that could be made to­day would reveal the kind of surplusinvolved here. To the contrary, all theevidence compiled by the Small BusinessCommittee shows that there is a short­age of unprocessed Federal timber in thePacific Northwest, and to a large degreethe shortage is attributable to exports.

I believe that paragraph (b) makes itclear that Congress expects the Secretaryhereafter to hold a public hearing whenhe wishes to declare a local specie sur­plus, or to sell for export a specifiedquantity from a specified region of a na­tional forest. The language of the amend­ment anticipates that the public hearingrecord "ill show whether that specie orquantity is in fact surplus to local need,

and that the judgment of the Secretarywill be guided by that record.

The language also makes c1earthat theneeds of domestic processors are amongthe primary needs to be taken into ac­count in arriving at such a judgment..Where a mill markets its lumber is notat issue here. Its consumption of timbermakes it a domestic user and processor,not the place where its product is even­tually retailed.

Finally, paragraph (c' is designed toenable the appropriate secretaries to de­velop administrative regulations to pre­vent the substitution of public timber forexported non-Federal timber. Therelurks in the minds of some the idea thatprocessors owning their own timber sup­ply will sell it for export, and replace itby bidding for public timber. Those ofus who have been following this wholeissue for many months have been alerttc that possibility. We have been watch­ing for it. We have let the industry kno'wthat such a practice would defeat thewhole objective of the April order of theDepartment and the amendment to thepending bill. In connection with theApril "determination," the large privatetimber owners volunta1ily assured Mem­bers of Congress and the Department ofAgriculture that they would not engagein this practice. I have not seen any indi­cation that private timber owners arecurtailing their own production in orderto sell their timber holdings for export.Most of them are large, integrated indus­tries. They have nothing to gain fromabandoning their domestic markets. Itdoes not appear that they are doing so,or are planning to do so.

Nonetheless, I think it is essential thatpublic confidence in the use of Federaltimber be maintained by taking all pos­sible steps to assure that this substitu­tion does not occur. That is why theappropriate secretaries are specIfically·authol'ized to prevent it.

Today I received a telegram from oneof the witnesses in our July 19 hearingthat bears directly on this problem. Itreads as follows:

Hon. WAYNE MonsE: Please include the fol­lowing additional statement in the record ofthe Senate Small Business Subcommitteehearing held in Washington, D.C. on July 19,1968:

Senator MonsE, during the hearing on ex­tension of the boundaries of primary manu­facturing requirements, segregated the logexport problem into three main categories.I agree with the Senator that log exports dofall into several general categories and shOUldbe regUlated accordingly. At this time, ourcomments will be directed to either export­ing Federal logs or the substitution of publiclogs for exported private logs.

r. Exporting Federal logs. This category hasalready been well documented at the hearing.However, it shouid be emphasized that con­tinued controi within the eXisting boundariesas well as extension of these boundaries isparamount to the locai dependent mlJIs re­gardless of the action taken on priva tetimber.

III. Exporting private logs and replacingthe exported private iogs With public timber.This replacement could be either simultane­ous substitution or a rapid depletion of pri­vate timber by accelerating the cut for ex­port purposes. upon completion of the ac­celerated depletion of private timber, theoperators COllld then pm'cbase pUblic timberto operate their mills left destitute for log:;because Of the log export progrnm.

This group of private timber holdersshould not be eligible to purchase publictimber to replace theIr depleted supply. Inaddition, other qualified purchasers of publictimber should be prohibited from se1l1nglogs to the above operators as a substitutefor their exported non-federal logs.

The amendment to sixteen U.S.C. 616adopted by tile Senate ForeIgn RelationsCommittee appears to provide for this typeof control.

We certainly support the approval of therestrictions of SUbstitution a.nd feel it isneeded now. At present, the primarY'manu­facturing regulation is relatively new so itwould be difficult to cite Instances whereprirate timber holders are exporting theirown timber and running up the sales on pub­lic timber. It does pose a real potential prob­lem and Industry should face up to it nowand request means to prevent this, such asSenator Morse's amendment to the foreignaid bill.

Thank you for the opportunity to includethis additional statement.

ARNOLD EWING,Nortluvest Timber Associatio'/l..

I want to thank Mr. Ewing for makingit clear that the industry is aware of thisproblem, and that it supports the type ofregulation to prevent it authorized bythe amendment. His statement is sup­ported by other expressions of indUStrysupport compiled by the National ForestProducts Association.

I also want the legislative history ofthis provision to make clear that the De­partment of AgriCUlture and the Depart­ment of the Interior have the adminis­trative auth01ity to impose such rulesand regulations and restrictions as maybe necessary to prevent any such poten­tial-but at the present time hypotheti­cal-abuse that Mr. Ewing and the seniorSenator from Oregon have been dis­cussing.

I want the RECORD to make perfectlyclear that the Senator from Oregon willnot only support the exercise of such ad­ministrative power on the part of theSecretary of Agriculture and the Secre­tary of the Interior, but, if this problemarises, I shall be insisting that they actunder this authority, because it would betheir clear duty to do it under a showingof such facts.

Finally, I would appeal to all factions,in Government and out, who are involvedin this issue to understand that there isnothing to be gained by letting this con­troversy continue to build up. Everyoneknows that is all it can do, in the absenceof the solution the Foreign RelationsCommittee has offered. Far from "goingaway," the conflicting economic pressurescan only grow. That means that the po­litical pressures can only grow, too.

The pending amendment is tt fair com­promise. It is only an extension of thedirective of the- Secretary of Agricultureof April 16, 1968. It comes to grips withthe issue, and it affords the means ofgetting it behind us.

It is fair to eastern Oregon, easternWashington, Idaho, Utah, Montana, andto all the states in which these greatnational forests are located, where thedanger is and where the Japanese arealready showing an intention to go intothe national forests in those States andcontinue the malpractice that charac­terized their buying in western Oregonand western Washington on which theSecretary of Agriculture put a ceiling

July 30, 1968 CONGRESSIONAL RECORD - SENA1'E 24189by his directive of April 1G in that lim­ited area. This is a matter in whichthere should be a uniformity of policy,covering all national fOl'ests, and it isalso a matter which calls for such uni­formity in carrying out the legal intentof the law of 1926. .

I say it is a fail' compromise. That iswhy I believe the amendment deservesthe support of every Federal agency, andthe· economic interests inVOlved, as well,I reCommend it to the Senate, and to theCongress,

MESSAGE FROM THE HOUSEA message from the House of Repre­

sentatives by Mr, Bartlett, one of itsreading clerks, announced that theHouse had passed, without amendment,the bill (S. 3679) to amend the act ofJune 19, 1968 (Public Law 351, 90thCong,).

The message also announced that theHouse had disagreed to the amendmentsof the Senate to the bill m,R, 16363) toclarify and otherwise amend the PoultryProducts Inspection Act, to provide forcooperation with appropriate State agen­cies with respect to State poultry prod­ucts inspection .programs, and for otherpurposes' agreed to the conference askedby the S~nate on the disagreeing votesof the two Houses thereon, and that Mr.PURCELL, Mr, STuBBLEFIELD, Mr. FOLEY,Mr. BELCHER, and Mrs, MAY were ap­pointed managers on the part of theHouse at the conference.

The message further announced thatthe House had agreed to the amend­ments of the Senate to the concurrentresolution (H, Con. R,es. 705) to assistveterans of the Armed Forces of theUnited States who have served in Viet­nam or elsewhere in obtaining suitableemployment,

ENROLLED BILLS SIGNEDThe message also announced that the

Speaker had affixed his signature to thefollowing enrolled bills:

S.222. An act to insure that certain bulId­ings financed with Federal funds are sodesigned and constructed as to be accessibleto the physically handicapped;

H.R. 11026. An act to amend the act ofSeptember 15, 1960, for the purpose of de­veloping and enhancing recreational oppor­tunities and improving the fish and wlIdllfeprograms at reservations covered by said act,and for other purposes; and

H.R. 17903. An act making appropriationsfor pub1!c works for water and power re­sources development, inclUding certain civilfunctions administered by the Departmentof Defense, the Panama Canal. certain agen­cies of the Department of the Intt"rior, theAtlantic-Pacific Interoceanic Canal StudyCommission, the Delaware River Basin Com­mission, Interstate Commission on the Poto­mac River Basin, the Tennessee Valley Au­thority, and the Water Resources Council,and the Atomic Energy Commission, for the.fiscal year ending June 30, 1969, and forother purposes.

TRANSFER OF HEADSTART TO THEOFFICE OF EDUCATION

Mr. MORSE. Mr. President, I turn toanother subject, which I must make amatter of record before I leave the floor

to go to a conference with the House onthe education bill, because I want to beable to show, Mr, President, that theanalysis of the majority of the Senate,as far as concerns the reason for the 60to 29 vote that seeks to transfer Head­start from OEO to HEW, has been putin the RECORD by the chairman of theSenate conferees.

Mr. President, in the July 22, 1968,issue of the Washington Post, on page 1,there appears a story written by MissEve Edstrom under the caption, "John­son Moves To Rescue Headstart." I askunanimous consent that the article towhich I have alluded be printed at thispoint in my remarks,

There being no objection, the articlewas ordered to be printed in the RECORD,as follows:SENATE SETBACK LAID TO WHITE HOUSE LAG-­

JOHNSON MOVES To RESCUE HEI>DSTART(By Eve Edstrom)

The Senat.e last week crippled the povertywar's most popular chlld-Head Start--whllethe White House reportedly stood still.

If the Senate action stands, Head Startwould be turned over to the states. Its mostinnovative ingredients would almost surelybe wiped out. Its neediest beneficiaries-thechlldren of the poorest Southern Negroes,Indians and migrants-would be all but shutout.

Yet Head Start supporters say their appealfor White House aid early last week wasbrushed aside on the grounds that the Sen­ate amendment didn't have a chance ofpassage.

But after it was adopted by a whopping60 to 29, the White House actively begantryinEl to undo the damage, Visits were paidto key Congressional leaders in an effortto overturn the Senate action when it goesto conference.

Actually, If there had been any coordi­nated Administration strategy during lastWednesday's hasty Senate debate, an accept­able compromise might have been workedout. But tJ:ie issues were so obscured thateven sens.'\tional charges against a Chicagostreet gang were used to hamstring HeadStart.

At first glance, the Senate amendment tothe Vocational Education Bill would appearto result in nothing more than a long-ex­peeted bureaucratic shift,

The popUlar Head· Start program for pre­schoolers would be taken away from theOffice of Economic Opportunity (OEO) andgiven to the Office of Education, effectivenext JUly.

But neither the Office of Edtlcation norits parent, the Department of Health, Edu­cation and Welfare (HEW), wants HeadStart tmder the conditions which the Sen­at-e imposed.

This is because Head Start money wouldbe channeled through state school agenciesand the Office of Education would not evenhave the final power to disapprove a stateplan fc,r Head Start funding.

As explained by the chief mover of theSenate amendment, Sen. Peter H. Dominick(R-Colo.), school officials "WOUld, therefore,state by state, be in charge of this pro­gram,"

Sen. John Stennis (D-Miss.) immediatelyappiauded the move to give Head Start tostate educators. He long has fought OEO­supported Head Start projects in MississippiWhich operated outside of the schools to getinnovative programs to the poorest Negrochildren.

An end to such projects is almost certainif the Senate amendment passes. Similarly,it is doubtful that states will give up fundsfor Head Start projects on Federal Inclianreservations or for children of migrants.

Furthermore, the argument that Sen,Wayne Morse (D-Ore.) made in support ofthe amendment is strongly contested by bothOEO and HEW officials. Unlike Morse, theydo not believe Head Start is strictly an edu~

cational program and should therefore be inthe Office of Education.

In a letter that was made part of the Sen­ate debate, HEW Secretary Wilbur J. Cohensaid:

"Head Start was imaginatively developedbv the Office of Economic Opportunity as partof a broad-scale and coordinated attack onthe many social prOblems-nutritional, med·Ical, psyChOlogical as well as educational­which contribute to the cycle of poverty.

"In this comprehensi\'e format, HeadStart has functioned exceedingly well ·underthe Office of Economic Opportunity and, con­sequently, we believe that Its assignmentthere should be continued."

This should not be interpreted to meanthat Cohen does not want Head Start withinHEW if It could be operated under the same.flexible guidelines that exist at OEO.

In fact, both OEO and HEW are in gen­eral agreement that Head Start should betransferred, either as an independent agencydirectly under the HEW Secretary's super­vision or as a component of the Children'sBureau,

This was a principal reason Why Jule M.Sugarman, the creator and developer of H.eadStart, left OEO in April to become aSSOCiatechief of the Children's Bureau. His job is toweld together all health, educational andwelfare services for pre-school children.

Such a coordinated attack on the problemsof preschoolers, along with the continuing in­volvement of parents that has character­ized Head Start programs, has been a chiefaim of Secretary Cohen. But the Senate de­bate did not focus on these aspeets of HeadStart. Instead, Morse in becoming a strongally of Republican proponents of the amend­ment, emphasized how OEO programs in hisstate have been beset by "inefficiency, bywaste and by maladministration." OEOsources say Morse is piqued because Con­gressional fund cutbacks forced the closingof a Job Corps center in Oregon.

Sen. Frank J. Lausche (D-Ohio) said hewould vote for the transfer because he hadread how OEO had supported a Chicago streetgang project that was controlled by "thugs,thieves, hippies, drug addicts."

Southern Democrats, angered because OEOused discretionary powers to fund projectsin their states. found themselves in the un­usual position of giving Head Start to oneof their chIef whipping boys, Education Com­missioner Harold Howe II, former enforcerof HEW school desegregation pollcies.

Thus, the Senate vote can be interpretedas stemming from broad anti-OEO feeling,rather than any considered judgment of howHead Start can best be operated.

The Head Start transfer has not been thesubject of hearings, and did not come up Inthe House when the Vocational EducationBill passed.

Senate conferees. who have been appointedto resolve the matter, are split right downthe middle-five voted for the trasfer andfive voted agrdnst it.

They will meet with yet-to-be-selectedHouse coruerees. Howe\'er, a majority ofthe House conferees will reflect the senti­ment§ of House Education and Labor Com­mittee Chairman, Carl D. Perkins (D-Ky.).

Perkins Is dead set against the transfer,but no one is predicting how the ba ttle willcome out.

Mr. MORSE. Mr. President, I wishto preface my remarks about the ma­terial contained in the story witha tribute to Miss Edstrom, who I knowto be a responsible and thoroughly com­petent journalist. What I have to sayabout the statements in the article-and