AN ASSESSMENT OF THE SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000200130049-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 16, 2016
• Document Release Date: January 24, 2005
• Sequence Number: 49
• Publication Date: January 23, 1964
• Content Type: OPEN

1012
would mean war. The second would cause
our friends to bid us a frigid farewell. Nei-
ther can be afforded.
The unhappy truth is that our hand has
been called. and we're not even holding a
pair of donate. The *12 million bus deal
tells Us Ro in a blunt and conpillcuous way.
Approved For ROONgiltgAiMilt qtkagtobeitopmpfp2o0130049-1 January 23
WHITHER THE UNITED NATIONS?
Mr. ZIEGLER, Mr. President. in the
Washington Post for January 15. 1964.
the lead editorial entitled "Whither the
U.N.?" merits the attention of readers of
the CONORIESIONLL RECORD. This is an
excellent editorial which details the
problem of representation in the United
Nations which is being aggravated by
the admission of so many small coun-
tries, and also the concern of the Secre-
tary of State, Dean Rusk, with the prob-
lem.
I ask unanimous consent to have this
editorial printed in the RECORD.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
Witrritsat Tits Ulf 7
What is the future of the United Nations?
In tackling that subject in the second Dag
liammarakjold memorial lecture at Colum-
bia University, Secretary of State Rusk
(in a speech delivered for him by Assistant
Secretary Cleveland) offered two thoughtful
suggestions which merit analysis by all
friends of the U.N. He does not regard the
United Nations as a static organization.
but he wants it to grow in ways that will
strengthen, and not weaken, its peacekeep-
ing function.
Actually the United Nations is a more in-
dispensable agency now than it was at the
time of its birth in San Francisco in 1945.
Today there Is agreement among all the
great powers represented in the Security
Council that nuclear war is utterly unac-
ceptable as a means of settling International
disputes: Chairman Ehrushethei of the
Soviet Union acknowledged In hisNew tear's
message that War over territorial questions Is
intolerable and that nations should not be
the target of direct or Indirect aggression. If
this generally accepted thesis is to be mean-
ingful, said arr. Rusk, the U.N. will have to be
used as a substitute for war in the settlement
of disputes. '
From this viewpoint the peacekeeping
-functions of the U.N. are vital to every state
and especially to the great powers. It serves,
In the Secretarre words, "not as a rival aye--
tern of order but as contributor to. and some-
times guarantor of. the common interest in
survival.* Even if some countries are dis-
appointed by the consequences of a U.N.
peacekeeping operation, they still profit
greatly from It for the simple reason that
survival is better than the annihilation that
would result from nuclear wa'.
This cogent reasoning has a special bear-
ing upon a problem that looms tarp in the
General Assembly In 1964. The Soviet Union
hue refused to pay its share of the expense
of keeping the peace in the Congo and in the
Near East. If this policy persists, the
13.8831. will lose Its vote in the Assembly and
critically 'weaken the U.N. as an adjuster of
disputes that otherwise might lead to war.
Surely If the Soviet Union is realistic in Its
pursuit or insurance against nuclear war, It
should be moving toward elimination of this
threat to the usefulness of the U.N.
The other problem to which Secretary Rusk
addressed himself arises from the growth of
the U.N. from its original 51 members to Its
present 113. Th. onrush of man, new na-
tions into the U.N. has made it theoretically
possible for 10 percent of the world's popula-
tion, who contribute only 5 percent of the
UN, assessed budget. to cast a two-thirds
Majority vote in the General Assembly. No
such problem has arisen and Mr. Rusk is not
fearful that It will, but he does emphasize the
fact that the United Nations simply cannot
take alemiacant action without the support
of the members who supply it with resources
and have the capacity to
This does not mean that he wants to shift
all U.N. power back into the hands of the
moribund Security Council. Nor doss he
look with favor on weighted voting in the
General Assembly. But his remarks are sug-
gestive of the direction in which the Ulf.
should be evolving. Nothing would be more
certain to destroy Its usefulness in the long
run than the making of U.N. policy decisions
In disregard of the chief Venters of world
peace.
THE CHANGED WHEAT DEAL WITH
RUSSIA
Mr. MILLER Mr. President, the dis-
tinguished columnist, Richard Wilson,
has written an article in the December
14, 1983, issue of the Des Moines Register
entitled "The Changed Wheat Deal With
Russia."
Because many complaints are still be-
ing heard about this question, and there
Is still, apparently, much misinforma-
tion about it, I believe that the article
merits the attention of readers of the
'CONGRESSIONAL RECORD, and I ask unani-
mous consent to have it printed in the
RZCORD.
There being no objection, the article
was ordered to be printed In the RECORD,
At follows:
THE CHANGED WHEAT DEAL WITH RUliata
(By Richard Wilson)
Virmornecros, D.C.e...-Th? wheat deal with
Mania has gotten coMpletely off the tracks
and in its present form is nothing like the
original proposal. This proposal was to mil
wheat to Samna for moh or on normal com-
mercial terms. It was a sulimadMeel sale in
the sense that all such transactiona in U.S.
wheat in the world market are subsidised,
but no more so.
The terms were made unmistakably clear
by President Kennedy. The sale was not a
govertureent-to-government transaction. It
WU a deal between private U.S. traders With
the credit, on normal commercial terms.
supplied by private banks. The traders mind
the bankers were to take the risk, not the
U.S. Government.
PAYING CASH
This made MIS& Nikita Khruslichev need-
ed wheat, and 5th needs it, because hial.ann
'programs are not successful There are bread
shortages in Russia. OiSclals here have beard
of nisorders in connection with bread dis-
tribution.
Klumshchev boasted that he had the cash
to pay for wheat. In fact, he is paying BO
percent cash to Canada because be doesn't
Lk* the commercial interest rate of 4% per-
cent on an 15-month Installment plan.
' The United States has a wheat surplus and
there are clear advantages to unloadbig it
for cash. This gets rid of the Wheat and
helps the balance-of -payments whim% and,
In any case, the Etnairlana can get wheat
elsewhere if we do not sell. It to them. go
we are pot saving communism by wiling
wheat to Runts for oath.
When Khrlisholutv saw that the United
? States was willing, even eager, to approve
priVate sales of wheat he began, to .haggle.
Be stopped talking of buying for Is.mb. which
Is the only rate basis fee deal With Russia.
Khrushchev wanted credit. ,
Bankers prudently said they wouldn't
ex-
tend credit without U.S. Government under-
writing. /Chrushchev objected to President
Kennedy's terms that the maximum amount
of wheat be moved in American ships. Ship-
ping rates, it was claimed, were too high.
Private arrangements for Klee to Maga, it
appeared, would collapse unless the p.a.
Government underwrote the whole, Witham- -;
non and subsidised not only the"espert
wheat itself but probably the rates ter ship-
ping It to Russia.
? Loan OU?SteNTSR
At this point, the U.S. Government, ;
through Treasury Secretary Dillon and Ez-
port-Import Bank ofacials, proposed a .loan
guarantee of 75 percent of the purchase
price. Congress reacted with a bill offered by
Senator Mower, Republican, of South Da-
kota, to prohibit such a guarantee.
The Senate Banking committee appeared
to favor this bill. But after the assassination
of President Kennedy it reported the bill un- t
favorably by a vote of 8 to 7 'as Ai tribute te ?
the late President, although Government A-
"lancing of the sale was not a pert of Mr.
Kennedy's original proposaL The bill was
then defeated in the Senate.
This leaves the way open for OuvernMant
underwriting of the transactions and that
Is in prospect unless President Johnson Were
to intervene and insist on the Original
terms of President Kennedy.
smasear. sans
President Johnson might well consider
doing this for several good reasons, Russia
needs the wheat more than we need to sell
It. In any case, trade with Russia is not
likely to be a signincant ken-term factor
In our balance of trade. The haggling With
the Soviet Government amply Ithestratm
that unless It will pay in gold the opportu-
nities for bilateral trade are limited. and '
even less promising on a multilateral bent.
What the United States stiouldbe eseitIng
Is a rational, normal basis for tirlid?Jidtal
Russia as we trade with other tiatlatialo,But
this basis does not exist for one aliggikiTIS-
son, and that is lack of ,00nadenin,
in-
fidence is an indispensable ahem* Tithe
exten is sion credit, and more soin tag*,
national trade than in domestic. Amide.
Lack of ocalidencs in the Soviet Union Is
why bankers will not extend credit niiiem
it is guaranteed. In this case, by the
Government
mess sem HARR= THRUM
? What the Soviet Union needs to Srati is
that if it is to be a responsible polices
In world trade It Wert be prepared *, So
on the terms of the rnazketplaos.' ?? !J,-
Those terms are that the buyer must tan-
vines the seller that he Is able and stadylo
pay a fair price based on supply aidelsesiutd.
Khrushchev talked that way last eintillair,
But this winter It is a different Martini Is'
so often the case from the hegtamacto the -
end Of a .." - with the aowietlYalea.
AN = N-1:0 OF THE SITUATI
IN sourni
Mr. MILLER, Mr. Preiddent.traiseaf
the beet assessments of the sitaation'in
South Vietnam was contained ht Ohs-
Patch by fledrick Smith which was PUti-
'11shed in the New York Times on Janu-
ary 12. In describing the deteriorating
situation there, the Times =tide under-
scores that part of the !milt Iles with the
United States. An American glacial.
according p3 Mr. Smith,' bad this com-
ment to make:
" Lies taco It A lot of the SOMA% gar;the
situation IS ours. We tinaneed sscet of those
?
programs, and we signed Wan theftr: This
'situation was going badly 1st temstliA and
acenaone wasn't checking up 'cal It for Mir
side. '
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4*.
This is a damaging indictment of our
policies and procedures; it is one which
should not be ignored. It will serve no
purpose to write off our blunders by
blaming Congress, as Assistant Secre-
tary of State, Roger Hilsman, implied in
an interview which was published in the
Washington Sunday Star on January 12,
the same day on which the New York
Times made the assessment.
In speaking of the Asian developments,
Mr. Hilsman declared:
All you do with cutting in aid is to stretch
out the time when some of these countries
are vulnerable to communism and to
stretch out the time when you are running
high risks, stretching out the period of
danger.
It is convenient to focus the blame on
Congress, but it also should be pointed
out that Congress has reduced foreign
aid because it is convinced the adminis-
tration of that aid has been ineffective
in many instances, and wasteful in
others. Once the administrators admit
that they share part of the blame, we
will begin to receive our dollar's worth
in the assistance we grant other
countries.
Eugene R. Black, former President of
the World Bank, put his finger squarely
on the problem, in an address on Novem-
ber 12 before the New York Chamber of
Commerce. He said:
The major trouble with our foreign aid
programs in the past has been too much
concern over quantity and packaging, and
too little concern over the quality of the
product itself.
This concern is felt by Congress. It
is about time that the State Department
and the Agency for International Devel-
opment remember the remark made by
Plutarch some thousand or so years ago:
Hard questions must have hard. answers.
Congress and the American people
have been asking those hard questions,
but the hard answers have yet to be
forthcoming. With the United States
providing half of the estimated $8.5 bil-
lion spent annually on foreign aid by all
nations, as pointed out in an article
which was published in the Davenport,
Iowa, Daily Times on January 3, we
must have those answers. The official
attitude must change to one of frankness
from the current one, which is accu-
rately summed up by Columnist Richard
Wilson in the Des Moines Register of
December 22, who wrote:
It is only a slight exaggeration to say that
officials of the foreign aid program would
much prefer it if neither Congress nor the
public knew much about its activities, ex-
cept the puff-stories on its great achieve-
ments which are not inconsiderable.
It is time that the administration re-,
alizes that a majority of Congress, as Mr.
Wilson puts it?
believes that the country wants to go slower
on foreign aid, be more selective, be more
certain that definite policy aims are being
pursued toward a useful conclusion.
I ask unanimous consent that the four
articles, entitled "Vietcong Terrorism
Sweeping the Delta," "Hilsman Sees
Slash in Aid Adding to Danger From
Reds," "United States Gives Half of
World's Foreign Aid," and "Passman's
Annual Battle To Cut Aid" may be
printed in the RECORD.
There being. no objection, the articles
were ordered to be printed in the RECORD,
as follows:
[From the New York (N.Y.) Times, Jan. 12,
1964]
VIETCONG TERRORISM SWEEPING THE DELTA
(By Hedrick Smith)
TAN AN, Saum VIETNAM, January 9.?Ter-
ror, which moves through the populous
Mekong River Delta with the bands of Com-
munist guerrillas, stole one sultry night into
the hamlet of Thuan Dao, 15 miles south-
west of Saigon.
Efficiently the guerrillas executed the ham-
let's militia leader, burned the administra-
tive office and began forcing the villagers to
tear apart their homes.
The militia, too terrified to resist, radioed
for help.
At the district center of Ben Luc, less than
half a mile away, there was a company of
Civil Guard troops. Two miles down the
main road, a battalion of Vietnamese Army
troops was guarding a bridge. Nearer the
hamlet was the headquarters of an army
engineer battalion. But no one responded to
the S 0 S from Thuan Dao.
By dawn, 40 houses had been smashed and
the militiamen were so demoralized that they
turned in their weapons.
The houses were repaired, and a visiting
American general remarked a few days later
that this was "a secure hamlet."
But the hamlet remained without ade-
quate defenses, and the guerrillas returned
last week and forced the peasants to tear
clown 50 more houses.
SAIGON'S CONTROL DEFIED
Since June scores of similar incidents,
backed by a relentless Communist propa-
ganda campaign, have undermined the gov-
ernment's authority in villages throughout
the Mekong Delta, home of a majority of
South Vietnam's population.
Guerrillas and political squads have
gnawed at the fabric of the government?its
ability to protect the peasants, its adminis-
trative structure and., apparently most im-
portant, its will to win.
Bit by bit the people's allegiance has
slipped away because of mismanagement and
neglect of the peasants' needs and aspira-
tions. Village governments have disappeared
or fallen into disarray, and higher officials
have abdicated their responsibilities.
AT LEAST, 75 PERCENT OF PEOPLE UNDER REDS
As a result, most of the rural population
in the delta lives, under Communist influence
in the critically important province of Long
An. U.S. advisers estimate that at least
three-quarters of the 387,000 inhabitants live
in areas controlled by Communists. Some
estimates are even higher.
Under President Ngo Dinh Diem, who died
in the coup d'etat of November 1 and 2, the
provincial administration was paralyzed by
politics and bureaucracy. District officials
reported only a fraction of the attacks on
their areas' strategic hamlets, or fortified
villages. They feared that if the province
chief learned the truth he would think they
had lost control of their districts.
One American officer recalls having asked
a former provincial governor, Maj. Nguyen
Ngo Xinh, about the deteriorating seturity
situation. "I don't know anything about it,"
he was told. "That's your concern."
THE OFFICIALS WROTE REPORTS
Local officials prepared neat statistical re-
ports about hamlets they had never visited.
"They wrote beautiful reports," one Amer-
ican official said, "but it was all a sham."
Now the military junta in Saigon is mov-
ing to revive the provincial government.
Maj. Le Minh Dao, an aggressive young army
officer born in Long An and trained at Port
Banning, Ga., has been named province chief.
He has replaced five of the six district chiefs
and has encouraged local officials to over-
049 1
1013
come their disdain for going into the ham-
lets, rolling up their sleeves and helping the
peasants.
Three battalions of paratroopers have been
sent here to deal with Communist combat
units and to start "clear and hold". opera-
tions to regain the territory. The U.S. Am-
bassador, Henry Cabot Lodge, has expanded
his civilian staff in the province from 1 man
to 12 and has promised the staff full support.
It has been more than a year since the
Government, with U.S. financing, intensified
the program of building strategic hamlets.
In an effort to introduce the peasants to a
non-Communist way of life, nearly half a
million dollars of U.S. aid has been spent.
NEARLY 50,000 QUIT HAMLETS
Yet the situation continues to deteriorate.
Fifty thousand Vietnamese have abandoned
the strategic hamlets, and it is felt that the
Government must make a fresh start.
At the prodding of Ambasador Lodge, the
military junta has decided to make Long
An Province a major testing ground of its
ability to Win the war against the Vietcong,
or Vietnamese Communist, guerrillas.
Long An's borders reach within 10 miles
of Saigon; thus it is the capital's soft under-
belly. The loss of Long An would give a
severe psychological jolt.
Long An is the garden and the granary
of South Vietnam. Through its rich green
rice fields and sugarcane fields runs Route
4, the Government's only Open road from
Saigon into tile Mekong Delta. If this road
fell into Communist hands, the Commu-
nists would control the flow of rice and other
foods into the capital.
Already the Government's control in Long
An is limited to seven main towns and a few
hamlets.
"If we can't win here," an American official
said, "we may as well forget the whole show."
PROSPECTS ARE DISPUTED
Even those most closely associated with
the new effort disagree over whether the
drive can succeed.
An American civilian remarked: "The war
fatigue here is so serious that it's hard to
know if these people still have the will to
win or can regenerate their drive and their
morale. Maybe if we face up to our mis-
takes, forget about useles target dates, and
put more people in at the field level?maybe
then we can begin to chew our way slowly
back into what has been lost. But it's going
to be a long fight."
A U.S. military adviser added: "I think the
moral fiber .of these people has deteriorated.
.There just Isn't any individual initiative or
/leadership, or any commander. willing to
take chances."
The U.S. Information Service has sent
American-led teams of Vietnamese into the
hamlets to learn what the peasants think
of the Government and what their demands
and complaints are. In the minds of many
Americans, however, the crucial unmet need
is for dedicated, capable civilian and military
leaders.
From an American helicopter over Long
An's rice paddies, one can see ample evidence
of the mistakes that have been made. En-
tire villages lie in ruins, roofs of houses torn
off, walls knocked in, inhabitants gone.
A number of ghost settlements lie within
the 3 or 4 miles of principal towns still con-
trolled by the Government. Rare is the
hamlet that is not somehow pockmarked by
the war.
Roads in the province have been chopped
up, and at least 25 important bridges blown
up by the guerillas. Land travel is hazard-
ous by day, impossibly dangerous at night.
When Major Dao, the new chief, ventures
even a mile or two from the provincial head-
quarters, a squad of soldiers follows in jeeps
armed with mounted .50-caliber machine-
guns.
Last September, provincial officials main-
tained that more than 200,000 people lived in
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1014 Approved For Release 2005/02M ? CONGRESSIONAL ?CIA-Rae,66M403R0002001300Naluctry 23
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--gib -
must stop paying lipservice to the imptir-
tame of civic action and really put some teeth
Into it."
[From the Washington Star, Jan. 12, 19641
HTLEIMAN SEES SLASHN AID ADDING TO
DANGER, FROM Rees
219 completed strategic hamlets. Today, ac-
cording to the best estimates, 20 of them,
and perbaps fewer, are functioning and are
In Government hands day and night.
BETWEEN 40 AND 50 HAMLETS RUINED
The province chief reports that 40 or 50
have been destroyed and are completely de-
serted: the rest have suffered great physical
or political damage.
Because the peasants' homes in the delta
are scattered over their farmland, the Gov-
ernment had to move thousands from their
traditional homes to establish the hamlets.
In Long An. 80,000 people were relocated.
Their resentment at having been moved VIEW
exploited by the Communists, and more than
half have left the hamlets.
Ten thousand more?originally permitted
to remain in their family homes--are re-
ported to have quite the hamlets because
living in them brought the guerrilla war to
their doorsteps. A trickle of dissatisfied vil-
lagers can be seen trudging away from ham-
lets, beds and personal belongings strapped
to their backs.
The local militiamen are deeply demoral-
ized. There have been so many defections
that the province chief hart only 2,600 men
in the Self-Defenee Corps. The corps, with
an authorized strength of 4,000, helpe guard
the hamlets and mans Government outpoets.
MANY IN MILITIA DISARMED
Of 3,000 peasants trained as part-time
militiamen for their hamlets, American of-
ficials estimate that 500 still have wen.ponn.
The rest have deserted or have turned in
their weapons, which made then special tar-
gets of the guerrWae.
Often the militia provided little protection
for the villagers and even abused those they
were suppoeed to guard. In one harnlet
peasants said corpsmen had allot at them
when they tried to protect their crops from
being eaten by militiamen's ducks.
Sometimes Vietnamese officials know little
about the hamlets they are supposed to
supervise. When a Vietnamese reporter
asked provincial officials about An Bunh, a
hamlet less than a mile from here, they de-
scribed it as one of the sat eet In the region.
When he asked to be taken there to spend
a night, one official after another made ex-
cuses for not going. Each sent him to a
lower ranking official.
A SHOCK AT SETTLEMENT
The canton chief, who ,finally drove the
reporter out toward the hamlet, indicated
that he had not been there for Weeks and
W86 unable to say whether any militiamen
were left. He refused to enter the hamlet
even by daylight without a military escort.
He left the reporter on the road outside the
hamlet and drove away.
Villagers later disclosed that the guerrillas
assassinated two top hamlet officials in De-
cember. A duck farmer spoke openly of his
fears.
"I used to be a member of the combatant
youth," he explained, but I have no longer
dared to spend the night at the hamlet since
our boss was beheaded. I look after my
ducks here during the day, but I spend
the night in town."
The deterioration of the hamlet program
began last June and July, when conetruc-
tion was speeded to meet deadlines set by
Prealdent Diem and his brother Ngo Dinh
Nhu. At the start of 1963 there were 70
hamlets In the Province. In theory this
number was doubled by June and trebled
by September. though the hamlets were
rarely in full operation and the guerrillas
were undermining them almoet as faat m
they were built.
"When the Province got into this statisti-
cal race," an American said, "there was a
combination of lying and trying to go too
f lar too fast. It just didn't work."
The hamlete were considered complete, art
official explained. once the villagers were in-
side and when fences and moats had been
built, even if the militia/nen were untrained
and defensea weak and even U "there was no
sense of community."
Many relocated families were not paid Gov-
ernment relocation allowances. Peasanta
were sometimes forced to buy construction
materials that were supposed to be furnished
by the Government and by the U.S. aid
programs.
Rich settlers bought their way out of
serving in the militia, and officials some-
times drew the hamlet boundaries to pro-
tect their holdings. Hamlet council elec-
tions were not infrequently rigged in favor
of. friends and relatives of the hamlet chief.
COUP ELLUMINATFD FLAWS
Supervision by Provinical authorities and
by the Americans was lax. "Let's face it,"
one American said. "A lot of the blame for
the situation Is (turn. We finenced most of
those programs, end we signed off on them.
This situation wait going badly for months
and someone wasn't checking up on It for
our side."
The situation that was exposed after the
coup of November 1 Mocked a number of
Americans They had suspected Uaat things
were going wrong but land had no real Idea
of how serious the situation was.
The Government had virtually abandoned
the field to the Communist/I. In Vinh Eon,
villagers said no local officials had vifilted
them since their hamlet was built In No-
vember 190. But they said the Commu-
nists had come often and had recruited 33
young men for the guerrilla forces.
The Communists developed a complete ad-
ministrative apparatus under five di/strict
chiefs. The backbone of their military
strength In the Province consists of one and
sometimes two tough full-time combat bat-
talions.
Each district ale? has a company of re-
gional guerrilla troops, and throughout the
Province a thousand or more local guerrillas
are at work. These are supported by several
thousand sympathizers serving as porters,
messengers, and helpers. Each village has a
Communist cell.
The Goverrunent faces these tasks:
To push out its military base from seven
major towns to provide an increasing number
of hamlets with security.
To meet some of the economic needs of the
peasants and to demonstrate concern for
their welfare.
To root out the Communist political struc-
ture.
Major Dao stated hls goals this way: "We
will consolidate some ertrategic hamlets near
the district and Province towns, and we will
help the people. Slowly, like oil, we will
spread out--elowly but surely."
The energetic 30-year-old Province chief,
who is said to work well with his American
advisers, is convinced that if the Govern-
ment forces can provide protection the peo-
ple will rally to the Government.
"These people are watching me," he said.
"If I am strong and just, they will come to
the Government If the Vietcong are strong-
er, they will go to the Vietcong."
Some Americans. eager to avoid the pitfalls
of the p:utt, fear that the new campaign will
become too military a ehow of force, giving
inedequate attention to the subtle political
and psychological task of winning the peo-
ple's allegiance.
"This Province cannot be saved uniesa we
oompleteiy change our thinking about how
to get the job done," one experienced Ameri-
can ?Motel Paid.
He added: "Military forces must provide
an umbrella while we build a cadre of civil-
ians with enough nerve to go out into the
hamlets to work among the people. We
(By Spencer Davie)
Assistant Secretary of State :Roger Littman
predicta that congressional cats in foreign
aid will lengthen the period oi high risk and
danger to Asian countries vulnerable to Com-
munist aggression.
Mr. Hilsrnan, the State Department's top
expert on the Far East, characterized the
problems confronting this region as "big and
bold." They cannot be solved in 1964 or in
any single year, he said in an interview.
"All you do with cutting in Edd is to stretch
out the time when some of these countries
are vulnerable to communism a.nd to stretch
out the time when you are running high
risks, stretching out the period of danger,"
he said.
CALLS CUT SERIOGs
"The more aid we have, the sooner we will
solve some of these problems and the less
time there will be risk and danger to the
whole of our foreign policies and national
security.
"So I think that an aid cut is a serious
matter."
M. Hilsman was referring oo the action of
Congress in reducing the fore` gn aid program
from an administration request of $4.5 bil-
lion to about $3 billion.
Mr. Hillman said he haa not detected any
sign of moderation on the part of Communist
China's present leaders. Among the unsolved
basic problems of the Far East, he also cited
Communist aggression, poverty, the need for
modernization and development.
Highlight of Mr. Hilsman's replies to ques-
tions follow:
Question. South Vietnam--is the situation
worsening?
Answer. I don't think I would agree with
the latter judgment. We h aye always been
aware that the most seriono area of all in
Vietnam was the delta area. The war effort
and the attempt to extend security to the
countryside has gone very well in the coastal
regions and the mountain provinces.
SEES VIET CONG I OSS
There has been a change of government
there Which means that there is a period,
which we are still in, where the new govern-
ment has to get itself fully organized. The
Viet Cong, the Communists, have attempted
to take advantage of this by stepping up their
military campaign ?? 'toe new govern-
ment has also stepped up its military cam-
paign to a higher level. Aa a consequence
? there are more battles and more cas-
ualties. Actually the castielty rate between
the Viet Cong and the government has turned
more in the favor of the government In these
last 3 years. Whether thie will remain, we
will have to say. I would sum up by saying
that, there is a serious problem in the delta
butt believe it can be resolved.
Question. What do you think of efforts to
neutralize South Vietnam?
Answer. 'Fhis is totally unacceptable.
The Vietnamese people in a valiant struggle
over several years have. demonstrated that
they want to eject Communists that have
been inspired and infiltrated from the north
In what constitutes a,ggreosion ? ? *. The
U.S. Government is determined to support
the Vietnamese Government in eliminating
this Communist terrorism.
Question. Will the United States be able
to withdraw its training mission from South
Vietnam by 1965?
Anawer. There has been some misunder-
standing of what this iumouncement of
October 2 meant and WC. It was not in-
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tyKESSIONAL RECORD ? SENATE
tended to end our training or support for
South Vietnam. It was not meant that
this was ending in 1965. What were re-
ferred to were personnel whose particular
tasks by this time (1965) the Vietnamese
could take over. Our purpose is to help
them but the major task is theirs. We will
continue to have a training mission. We
will continue with whatever _aid is necessary
to win.
INTERPRETS SPEECH
Question. On Communist China do you
see any trend in the direction of modera-
tion that might evolve among Chinese Com-
munist leaders. In your recent spe.cch on
the open door policy toward Communist
China were you talking in the historical
sense of a trend that might take place?
Answer. I didn't use the word moderate or
moderation and I really don't expect this
out of the Chinese Communists. The
speech enunciated a policy of firmness,
flexibility and dispassion. Firmness in our
support of the Republic of China on Taiwan
(Formosa) and of our commitments to
them and our determination to honor these
commitments. Firmness in dealing with
any aggression from the Chinese Commu-
nists; flexibility, to keep an open door to
developments in this part of the world, and
in terms of looking at developments coolly
and objectively; and dispassion in terms of
not being ruled by emotion as you deal with
complicated problems.
In the speech I talked about second-
echelon leaders not in terms of expecting
them to be more moderate, but in terms of
the fact that they must surely realize the
failures of this older group that has been in
control. I would expect they would be
critical of these leaders. The Chinese Com-
munists only a year ago launched an aggres-
sion against India. They have been stirring
up trouble in Laos and Vietnam. I see no
signs of moderation.
[From the New York Times, Jan. 3, 19641
UNITED STATES GIVES HALF OF WORLD'S FOR-
EIGN AID
(By A. I. Goldberg)
UNITED NATIONS.?Put you thumb down
anywhere on the land areas of a world map
except North America and most of Europe,
and you'll jab a tender spot where part of
$8.5 billion is being spent annually in for-
eign aid, to developing countries.
Alphabetically the recipients range through
124 countries and territories from Aden to
Zanzibar. Geographically they circle the
globe.
About $2.5 billion is in private investment
aid.
The remaining $6 billion is in public funds
distributed in the form of grants, loans,
training of experts and sending of technical
experts and equipment. It is distributed bi-
laterally, from country to country; regionally
from or to groups of countries; and multi-
UNITED NAT/ONS.?Put your thumb down
laterally, from many countries to many
countries and funneled through agencies.
Outside of the fact that the United States
accounts for one-half of all foreign aid in
the world today, nobody has any precise fig-
ure just who gives how much to whom.
A U.N. technical assistance survey, stress-
ing that it was not official developed these
other general facts:
Nobody knows just how the private invest-
ment aid is shared.
About 10 percent of public aid is chan-
neled through the United Nations.
Chief donor countries are the United
States, Britain, France, Soviet Union, West
Germany, Canada, Japan, and Switzerland.
Other important donors in bilateral aid
programs are Netherlands, Denmark, Nor-
way, Sweden, Portugal, and Italy.
Australia and New Zealand channeled their
contributions thorugh the British Common-
wealth Colombo plan.
Every one of the 87 countries classified by
the U.N. members as underdeveloped gets
some form of aid either in direct help or in
technical assistance and advice.
The U.N. survey showed that U.S. aid pro-
grams were represented in 81 less developed
countries but were concentrated in about 20
that got about four-fifths of the $2.6 billion
budget of AID?the Agency for International
Development.
Largest U.S. programs were listed in Korea,
Nationalist China, Philippines, Vietnam,
India, Pakistan, Israel, Turkey, Greece, and
Brazil.
More than half of the total aid budget's
nonrepayable development grants go to Latin
America and to Africa.
Latin America needs are fed through the
six specialized agencies of the Organization
of American States and through the Inter-
American Development Bank.
The United States also contributed $1 bil-
lion to the British Commonwealth Colombo
Plan in 1962. Britain is another mainstay
of that program which spent $1.8 billion in
1961-62, chiefly for countries of southeast
Asia.
Britain's bilateral expenditures were ex-
pected to reach $500 million in the 1963
fiscal year. They were concentrated in
Kenya, Tanganyika, Uganda, Nyasaland, Ni-
geria, and northern Rhodesia in Africa; Ja-
maica, India, and Pakistan.
Britain's Colombo Plan disbursement dur-
ing 1962 was $96 million. Australia con-
tributed almost $9 million, New Zealand $2
million.
Excluding its contributions to multilateral
programs, France distributed $879 million in
grants and loans during 1962, the greater
share going to Algeria. The next largest
share went to the 14 newly independent
African and Malagasy states. After that
there were contributions to Morocco, Tunisia,
Cambodia, Laos, Vietnam, French overseas
departments, and some countries in Latin
America and Asia.
West Germany disbursed the equivalent of
$277 million in 1962 on all forms of economic
aid to developing countries, exclusive of con-
tributions to the United Nations and Com-
mon Market funds, and reparations pay-
ments.
The largest amounts were used in India,
Greece, Afghanistan, United Arab Republic,
Iran, Ethiopia, Ceylon, Tunisia, Congo, Leo-
poldville, Togo, Thailand, Indonesia, Bolivia,
Guinea, and Jordan.
Soviet figures are shadowy. From best re-
port the Soviet Union has aid agreements for
technical assistance in industrialization with
29 developing countries. The United Nations
estimates the total committed in 1962 at the
equivalent of about $400 million "although
the amount disbursed may be less," it says.
The U.N. survey cites Soviet aid to build
more. than 480 industrial plants of various
sorts in India, Indonesia, Afghanistan, United
Arab Republic, Iraq, Syria, Ghana, Guinea,
Somalia, Mali, and Sudan among them.
The major European donor nations, along
with the United States, Canada, and Japan,
also distribute aid through the Development
Assistance Committee (DAC) of the Organi-
zation for Economic Cooperation and De-
velopment (OECO). Other members are
Belgium, Denmark, France, West Germany,
Italy, Netherlands, Norway, Portugal, and
Britain.
Belgium spent $68.5 million in 1962 on eco-
nomic aid, much of it to Congo Leopoldville.
Canada's total expenditure in aid in 1962
was $37.6 million. The biggest portion went
to such Latin American countries as Brazil,
Chile, and Mexico, and to Colombo Plan
countries such as India, Pakistan, and Ceylon.
1015
Japan's bilateral aid expenditure in 1962
was $94 million with Asian members of the
Colombo Plan and some Latin American
countries as beneficiaries.
Of the remaining DAC members, the
Netherlands devoted $42 million in 1962 to
economic aid on a bilateral basis, Portugal
$40.7 million, and Italy, Denmark, and Nor-
way somewhat lesser amounts.
Other countries listed as having bilateral
aid programs are Austria, Sweden, Switzer-
land, Israel, the United Arab Republic,
Czechoslovakia, Hungary, Poland, and India.
[From the Register, Dec. 22, 1963]
PASSIVIAN'S ANNUAL BATTLE To CUT Am
(By Richard Wilson)
WASHINGTON, D.C.?Orro ERNEST PASSMAN,
63, is a Democratic Congressman from Lou-
isiana. Annually, PASSMAN gets into a fight
with the White House over foreign aid spend-
ing. He is chairman of the Appropriations
Subcommittee which handles this trouble-
some item.
It is usually said that PASSMAN is trying
to superimpose his judgment on that of
four U.S. Presidents and any number of other
outstanding personalities. This devastating
remark is supposed to crush PASSMAN and
hold him up to public scorn as the wrecker
of the foreign aid program.
The truth seems to be, however, that PASS-
MAN knows more about the foreign aid pro-
gram than any President has had an oppor-
tunity to know for the simple reason that
he has studied it longer and in more detail.
CONVENTIONAL LOUISIANIAN
He has handled the foreign aid appropria-
tion for 9 consecutive years. PASSMAN is not
a liberal; he is a conventional Louisianian,
but with a flair for rather rakish attire and
an endless patience in coping with one of
the really big practical problems of modern
government.
It is only a slight exaggeration to say that
officials of the foreign aid program would
much prefer it if neither Congress nor the
public knew much about its activities, ex-
cept the puff stories on its great achieve-
ments, which are inconsiderable.
The official attitude about foreign aid is
that it is an instrument of foreign policy
used by the President under his constitu-
tional authority to direct this policy. What
flows from that conception is that Congress
should not, indeed cannot under the Con-
stitution, interfere.
MUCH IS HIDDEN
This is an impractical concept, which
PASSMAN annually demonstrates to be faulty.
However, much of what is done under the
foreign aid program is hidden from the pub-
lic. There was a time when it was a secret
how the money was divided up between vari-
ous countries.
Every now and then a little something
leaks out, like Lebanese bulls with nine stalls
apiece or extra wives for Kenyan Govern-
ment officials, or air-conditioned Oaciillacs
for Middle Eastern potentates.
A suffering public has become more or less
conditioned to this kind of thing and would
not abandon foreign aid for this alone. Nor
is it likely that the public as a whole would
end all foreign aid, however much annoyed
it may become over waste and incomprehen-
sible spending abroad when there is so much
that needs improvement in this country.
But it is clear that a majority in Congress
believes that the country wants to go slower
on foreign aid, be more selective, be more
certain that definite policy aims are being
pursued toward a useful conclusion.
Every year for 9 years the clamor has come
from the White House and the Department
of State that any cutback will wreck our
foreign policy. And any time there is a cut
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1016 CONGRESSIONAL RECORD ? SENATE Januall .23
our foreign policy never seems to be demon-
strably better or worse off.
A few facts are useful in this connection.
In the last 8 years Congress has reduced the
White House budget requests by more than
$6.5 billion. Yet every year more money WWI
appropriated than foreign aid officials could
use.
The so-called pipeline--funds from past
years which are committed to continuing
lion. Foreign aid could go on for several
years without another penny of appropria-
tion.
It if; not uncommon for oflicia/s to make
huge allocations of their funds In the last
2 or 3 days of a fiscal year so that they won't
have :my uncommitted money left, and can
claim they are emptyhanded in meeting the
world's challenges.
ToTAL OR 1744 MILLION UNOBLIGATED
Last year the White House, the State De-
partment, and the Defense Department all
said our foreign policy was being wrecked
by a billion-dollar cut. Yet these agencies
finished the fiscal year with 8744 million of
unobligated funds on their hands.
Basically, the facts do not support any
contention that Congress has either wrecked
the foreign aid program or really harmed it.
Nor does the contention hold water any
longer that the Russians are rushing In where
we pull out. The Russistrus have had their
own serious problems with foreign aid.
This appears to he one case where instinc-
tive public reactions e.re right that we have
been spending too much on foreign aid and
not getting enough out of It.
The PRESIDING OWLCER (Mr, BYRD
of West Virginia in the chair). The
time of the Senator from Iowa has ex-
pired.
Mr. MILLER. Mr. President, the time
was changed to 8 minutes from the mi-
nority and 7 minutes from the majority;
accordingly. I ask unanimous consent
that I may proceed for an additional 3
minutes taken from the minority side,
and 2 minutes from the majority aide.
Mr. PASTORE. Mr. President, I have
no objection.
The PRESIDING OFFICER. Is there
objection? There being no objection,
the Senator from Iowa is recognized for
5 additional minutes.
SOLICil ATION ACTIVITIES OF THE
DEMOCRATIC NATIONAL COMMIT-
TEE AMONG GOVERNMENT EM-
PLOYEES
Mr. MILLER. Mr. President, in the
Washington Evening Star, columnist
Joseph Young has again performed a
public service by throwing the spotlight
on solicitation activities a the Demo-
cratic National Committee among Gov-
ernment career employees.
In his column of January 16, Mr.
Young reports that the drive among Fed-
eral employees apparently is even great-
er this year since some who had not been
solicited previously are now being con-
tacted.
The Democratic National Committee
has other sources from which to draw
upon without placing Government em-
ployees in an untenable position of being
forced to attend a $100-a-ticket Demo-
cratic fundraising event on May 26. As
I remarked on the floor last December
13, this action by the committee is high-
ly unethical and unfair.
I believe that such solicitations of our
civil service employees should and must
be repudiated by President Johnson and
any other President. Republican or Dem-
ocrat.
We cannot afford to place Government
employees in a position to cause them to
feel they must purchase tickets for one
party or the other in order to retain
their jobs or secure their promotions.
I ask unanimous consent to have
printed in the RECORD, the article en-
titled "Career Employees Solicited Again
for $IG? Democratic Dinner."
There being no objection, the article
was ordered to be printed in the RECORD,
as follow! :
CAREER EMPLOYEES SOLICITED AGAIN FOR $100
DEMOcRATIC DINNER
(By Joseph Young)
Government career employees have received
their third letter of solicitation from the
Democratic National Committee to attend
the $100-a-ticket Democratic fund-raising
affair this year.
The event is the "Salute to President
Lyndon B Johnson" to be held at the Dis-
trict Armory on May 26.
M this column disclosed aeNeral weeke ago.
Federal career employees from the middle
grades on up bad received two letters from
the Democratic Committee In recent week.
in connection with the affair. Originally,
the event was to have been held this month.
but was canceled due to the death of Pree-
Ident Kennedy. The rreeond letter from
Democrat]c National Committee Chairman
John Halley advised of the poetponement
and told employees they would hear from the
committee later, advising them of the new
date for the event.
Sure enough, on January 10 a third letter
went out to Federal career employes. signed
by Mr. Bailey. edvising them that the event
would be held May 28.
"May I urge thor,e of you who have not
yet forwarded your contributions to do so
now," Mr. Bailey wrote. We need your
continued support."
The requesta puts many Federal career
employees in a dilemma. If they buy tickets,
they could find their Jobe in Jeopardy with
any subsequent Republican administration.
On the other hand, If they are M line for
promotions and career advancement, or even
value the Jobs they have, some of them feel
It would be best to purchase the Sl00 tickets.
A similar solicitation drive by the Demo-
cratic National Committee among Govern-
ment employes last year raised much criti-
clam among Republican Membere of Con-
gress and elsewhere. However, apparently
undaunted. the Democrater drive among
Federal employes this year is even greater.
Some career employees are being contacted
who weren't solicited laert year.
FAILURE OF LATIN AMERICAN NA-
TIONS TO FACE UP TO INFLA-
TIONARY PRESSURES
Mr. MILLER. Mr. President, the fail-
ure of many Latin American nations to
face up to the inflationary pressures oc-
curring within their own countries has
never been better illustrated than in an
article published in the Wall Street Jour-
nal of January 16. While the article.
written by Henry Gemmill, deals primar-
ily with what Is happening In Brazil, it
Is clear that the same story is being re-
peated in other Latin American nations.
When one nation, such as Brazil, accepts
inflation as a way of life, it cannot help
undermining the economies of other
countries with which it must deal.
When the Alliance for Progress was
initiated in the early part of this admin-
istration, it was to serve as an agent to
lead Latin American governments to in-
stitute policies to uplift their economies.
But the Alliance's effectiveness is still
one of deep uncertainty?and one of real
doubt.
Mr. Gemmill points out how the
United States is caught on the horns of a
many-faceted dilemma?if we dole out
more aid to Brazil, the leaders will use it
to fuel more inflation; if we refuse more
aid, the leaders will use this as the pre-
text for inflaming anti-Americanism and
seizing dictatorial power?or if we just
string along, we can merely hope the in-
flationary storm can be weathered.
If there ever was a need to reexamine
our Latin American approach, it is now.
Since 1946, the United States has poured
close to $8 billion into Latin America?
with more than $2 billion going into
Brazil alone. In fiscal year 1963, Latin
America was the recipient of more than
$1 billion, with Brazil's share amounting
to more than $1'12 million What do we
have to show for it? Not very much, it
would be safe to say.
If Latin America does not wish to help
itself, should we continue to throw away
our taxpayers' money? I do not advo-
cate the elimination of aid, but we must
recognize our responsibilities to the
American taxpayer by obtaining some re-
sults. To date, there has been little evi-
dence of that?nor is there much
evidence that Brazil, and most other
countries in this area, plan to take con-
crete action to right the situation.
This is pointed up in the last para-
graph of the article. A noted Brazilian
economist is quoted as saying:
This Inflation la ruinous But we don't
want to stop it, of course. What we must do
Is cut it down to a healthy 20 percent per
year.
I would suggest that economic stability
can only start at home, and until Brazil-
ians and other countries accept this, our
money aid will do little to correct the
situation.
I ask unanimous consent that two
articles, one entitled "Inflation Eats
Away at Brazil's Economy, Undermines
Other Latin kmerican lands," and one
entitled "Another Bad Year Is Likely for
United States in Latin America," be
printed in the RECORD.
There being no objection, the articles
were ordered to be printed in the RECORD,
as follows:
[From the Wall Street Journal, Jan. 16, 19641
INTI,ATION EATS AWAY AT BRAZIL'S ECONOMY.
T.INDERTATNES OTHER LATIN AMERICAN LANDS
(By Henry Gemmill)
WAEMINGTON.?Tom Mann has already dis-
covered in Panama that the challenges he
faces as President Johnson's chosen czar for
Latin America are topped off not by the
noble new uplifting efforts of the Alliance
for Progress but by nagging old problems.
On the isthmus, he secs smoldering fires
of nationalism bursting into fierce flame.
If he has time to look farther south, he Can
sight the destructive power of another old
Latin bugaboo: Inflation.
It's running riot M Argentina and Chile:
an outbreak threatens in Colombia. Worst of
all, the biggest and most destructive infla-
tion Is in the biggest and most important
nation, Brazil. If the Assistant Secretary of
State can figure how to halt it, he'll deserve
a diplomatic blue ribbon?for achieving a
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