U.S. DOLLARS GO TO CASTRO VIA FRANCO: A NEW FASCIST-COMMUNIST BEDFELLOWSHIP FOR WHICH OUR DEMOCRACY PAYS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000200170123-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: January 3, 2005
• Sequence Number: 123
• Publication Date: February 7, 1964
• Content Type: OPEN

1964 fi` Approved FoC&4?@Q!QVREf,~QPS%B00'00170123-4
and for the people of the United States of
Amnerica to whom we feel as close in their
hour of misfortune as at the time of their
victories.
GOVERNMENT REGULATIONS
Mr. FULBRIGHT. Mr. President,
those of us who are old enough have
watched the size and the responsibilities
of the Federal Government grow to enor-
mous,proportions in the past 30 years. I
do not, as some do, ascribe this phe-
nomenon to malice or lust for power on
the part of bureaucrats. It is due to the
complexity and enormous growth of our
economy which has required govern-
mental support and regulation. This is
neither good nor bad-it is simply a fact
of life. While many of us whose origins
are in the relatively simple environs of
small town America remember with nos-
talgia an earlier and a more simple time,
we recognize that big government like big
business is here to stay.
I believe, however, Mr. President, that
the very fact that Federal regulation of
certain facets of our economy has grown
so greatly imposes even more grave re-
sponsibilities on those who are the in-
struments of this regulation. These in-
struments, known variously as adminis-
trators, commissioners, directors, bu-
reaucrats, or in some cases those so and
so's are, in most cases, devoted men try-
ing to do a good job.. Nonetheless, on
occasion there arise situations where it
seems that the bureaucracy has a pur-
pose and a character of its own separate
from the aggregate of the individual wills
of which it is comprised. I wish to cite
for my colleagues one example of this
phenomenon which should be a warning
to all of us engaged in the formulation
of public policy.
Last summer I'received a call from the
president of the Campbell Soup Co.,
which has a fine plant in my hometown,
regarding a problem which his company
has experienced with the Department of
Agriculture. Like the thousands of re-
quests which each of us in the.Senate
receive each year, I assumed that his dif-
ficulties stemmed from. a lack of com-
munication, a misunderstanding, perhaps
some quirk in the law, or at worst an
error on the part of a functionary who
could as easily be an employee of the
company as of the Department of Agri-
culture.
Upon investigation, however, I became
increasingly, appalled and frustrated
with a,= bureaucratic snarl which appar-
ently cannot be untangled.
The story goes something like this. In
May 1961, the Agricultural Marketing
Service published regulations' to estab-
lish labeling requirements for dry soup
mixes bearing a label describing them as
containing poultry. These regulations
were issued under the Poultry Products
Inspection Act with the obvious purpose
of protecting the American consumer
by giving him the assurance of a Fed-
eral Department, that when a product is
labeled "chicken noodle soup" the poor
consumer can be confident of finding
some chicken among the noodles. These
regulations were, however, altered by ex-
empting from Agriculture Department
jurisdiction those dehydrated soups con-
taming less than 2 percent poultry in the
reconstituted state. To give the Agricul-
ture Department its due, it apparently
assumed that the Food and Drug Ad-
ministration would police this exempted
field under its general jurisdiction to re-
quire descriptive labels on food products.
The Food and Drug Administration,
however, had different thoughts. Con-
tending that a mere exemption of such
products did not constitute a finding on
the part of the Department of Agricul-
ture that they should not bear the word
"chicken" on the label, FDA would not
accept this responsibility. Consequently,
while Campbell's, relying on the intent
of Agriculture's regulations, produced
chicken noodle soup with a greater-than-
2-percent poultry content some of their
competitors did not. I might point out
for the edification of those not schooled
in such matters that it is quite difficult
to alter the production cycle on such
products and Campbell's was in fact
trapped with a better and thus more cost-
ly product simply because the company
sought in good faith to adhere to what
is believed to be regulations promul-
gated to protect the public interest. It
could, of course, have begun producing
dry soup mixes with less chicken, but
there was reason to believe that effective
regulation was to be expected. I con-
fess that 2-percent chicken seems to me
to be little enough to justify calling it
chicken.
This situation persisted in spite of re-
peated pleas from the company for a
clarification of the Government's posi-
tion. Upon directing an inquiry to the
Department in the summer of 1963, I was
advised that discussions were in prog-
ress between the Department of Agricul-
ture and the Food and Drug Administra-
tion to resolve the problem. It was indi-
cated by officials in both agencies that
as it stood the situation was discrimina-
tory and that a solution would soon be
forthcoming, although the Commissioner
of the Food and Drug Administration
made it quite clear that the basic respon-
sibility for regulating poultry and poul-
try products was given to the Depart-
ment of Agriculture in the Poultry Prod-
ucts Inspection Act.
Assuming the good faith of all parties
I was sure that the matter would be
promptly cleared up and dismissed it
from my mind.
The next step in our little drama came
on October 10, 1963, when the Agricul-
ture Department invited comments on
new regulations to establish a definitive
minimum poultry, content on products
bearing the poultry label. Comments
were to be submitted by December 16,
1963, and it was indicated that a public
hearing would be held should there be
substantial controversy.
A hearing was requested and set for
January 24, 1964. But, it seems that the
31/2 months between the publication of
the new regulations on October 15 and
the hearing date of January 24 did not
provide sufficient time for those com-
panies- requesting a hearing to pre-
pare evidence on the issues in-
volved. The Department of Agriculture,
wishing to be fair, I am sure, has now
postponed the hearing until March 23
2361
and very thoughtfully extended the time
for filing written comments on the pro-
posed regulations until March 31.
There will, of course, have to be time for
analysis of the hearing record and all
other evidence and with luck we can ex-
pect a final decision by May 1964, some
3 years after the problem was created.
I set this deadline with some trepidation
in view of the seeming reluctance to
bring this fascinating chain of events to
a conclusion.
I am not apprehensive as to the future
of Campbell's Soup. Nor do I feel that
what is good for Campbell's Soup is good
for the country. There is no doubt
about the company's ability to look after
its own interests. Nonetheless, this case
is a prime example of bureaucratic
buckpassing at its worst as two Federal
agencies have worried with the intrica-
cies of administrative law while a pri-
vate concern with obligations to its em-
ployees, its shareholders, and the public,
has been left in utter frustration trying
to determine the Government's policy.
I impute no bad faith to Campbell's
competitors upon whom there has been
no compulsion to change their labeling
practices.
I simply cite this situation as one ex-
ample of government at its worst-with
can produce one to top it.
FRANCO: A NEW FASCIST-COM-
MUNIST BEDFELLOWSHIP FOR lY
WHICH OUR DEMOCRACY PAYS iJ~
Mr. GRUENING. Mr. President, on
November 14, 1963, during debate on the
foreign aid authorization bill, I said I
saw no reason for the United States of
America to "pay so lavishly and gen-
erously to implement the Spanish econ-
omy." Our assistance then, and in years
before, and today has not enlarged the
liberty of the Spanish people in any
measurable degree.
Freedom of the press, freedom of as-
sembly, freedom of speech are unknown
in Spain. Freedom of worship is limited.
Even as we deplore the lack of these
freedoms in Spain, we continue to pour
billions of dollars into that country which
perpetuates the dictatorship and enables
the Government of Generalissimo Fran-
cisco Franco to aid Cuban Premier Fidel
Castro even as we attempt to curb the
trade our allies have with the Cuban
dictator. Specifically, General Franco
is reported to have negotiated with Cuba
a 350,000-ton agreement for the pur-
chase of sugar totaling $81 million. This
purchase, says the London Observer, is
to be paid for in part with fishing trawl-
ers valued at $51 million. Spain has
traded with Cuba previously. In 1963,
exports to Cuba from Spain were valued
at $12 million.
The trade areas appear to be expand-
ing for a number of news accounts tell
us that a Cuban trade commission visit-
ing Spain negotiated the purchase of
electric trains and machinery and has
returned to Cuba with supplies of books
and eggs valued at "several million dol-
lars." I we total what we learn simply
by reading, the trade between Spain and
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Cuba in 1964 will approximate $100 mil-
lion at least.
Obviously, we are being made fools of
in the most gross planner.
We had better take a quick, new, real-
istic appraisal of our assistance program
as it applies to Spain unless we really
do not care about he billions of dollars of
the taxpayers money which is being used
improperly.
I believe most citizens care. I think
most citizens would like to know the ex-
tent of our foreign aid program to Spain
which unofficially may approach $4 bil-
lion dollars since 1953.
News Correspondent Lawrence Ferns-
worth, a correspondent in Spain during
the Spanish civil war and who continues
to be informed on events in Spain, has
put over generous Spanish handout into
proper and agonizing prospective in his
February 10, 1964, article entitled
"Spain: Concealed Handout," appearing
in the Nation.
Mr. President, I ask unanimous con-
sent that the full text of Mr. Ferns-
worth's excellent piece be printed in the
RECORD In full at the close of my remarks.
The PRESIDING OFFICER. Without
objection, it is so ordered.
(See Exhibit 1.)
Mr. GRUENING. Mr. President, the
article illustrates the grievous gaps In
our knowledge in assessing the extent
of U.S. aid to >pain. Author Ferns-
worth notes our continuing error of loan-
ing money at an interest-free rate for
the first 10 years and at three-quarters
of 1 percent for the next 30 years. The
Irony is, of course, that the U.S. Gov-
ernment Itself must pay approximately
4 percent to borrow the money it lends.
This so-called "loan" is one of the con-
tinuing giveaways which I sought-un-
successfully-to eliminate by amend-
ment to our foreign aid bill during de-
bate on H.R. 78135 which amended the
Foreign Assistance Act of 1961.
The amendment I offered was designed
to make our so-called development loans
realistic and to terminate a kind of fraud
on the American people. Nine Members
of this body cosponsored my amendment
which merely provides that the United
States would exact the going interest
rate plus one-quarter of I percent as a
carrying charge. Thus, the loans made
would have been valid loans and the rate
of interest would not have been usurious.
During my exrlanation of the amend-
ment I cited as one glaring misuse of
American taxpayer funds a loan made
to the Egyptian Government to build a
powerplant in west Cairo. I ask unani-
mous consent that my remarks in ex-
planation of the absurdity of such loans
and their cost to the taxpayer be re-
printed In the RECORD at this point in
my remarks.
There being r.o objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
STATEMENTS BY SENATOR GRUENINC
I illustrate what I am speaking about by
stating a specific example. I was in Cairo
last February. While I was there, I was
present at the signing by the American Am-
bassador of a $30 million roan to Mr. Nasser
to build a powerplant In west Cairo. A pow-
erplant Is a moneaking enterprise. From
_im
the time it starts generating and delivering
Its i,ower the dictator can charge his non-
sum are-his electricity users-any rate ':hat
he , rahes. Yet the loan provides that for
10 tsars he shall make no payment whatso-
ever. Meanwhile, we are borrowing mtmey
fron. the American people at about 4 per-
cent, so that in each of those years it Is
cost jig us $1.25 million, which is the di er-
enc( between no pyarnent on the part of
Was r,r and what we have to pay. So. In the
first 10 years, even before he starts repaftng
the Loan, the Treasury will be out $12.5 .11il-
lion
Mr. GRUENING. Mr. President. the
dim ussion which ensued was vigorous
anc healthy and I believe helpfu.. to
Me- nber8 of this body.
'I he full discussion appears in the CoN-
GRE I..WONAL RECORD of November 8. start-
Ing on page 20418 and concluding on
Pat, a 20428.
its amendment, rejected by a vote of
30 reel and 44 nays, reflects a growing
concern by Members of the Senate as to
the use of taxpayer money for Icon
whch are little more than handouts.
I: is interesting to note that France
ant other European nations which our
AII) program has made prosperous are
loa ling money to Spain at commercial
interest rates and that France. In return,
ma i play an active role in the distribu-
tio, i of the money and is recel ring
Iav)red treatment as Spain raises its tar-
iff I 'arriers.
This continuing flaw in our develop-
me it loan program and others are spot-
ligllted by Mr. Fernsworth and I. for one,
api 4aud his truthfulness.
I et us contrast what the crop is
reaped by benevolent U.S. taxpayent.
first. Low Interest rate repayment by
Sp: in on loans.
f,econd. A growing accumulation of
cot nterpart funds on deposit In Spain
for commodity credits received from. the
United States which can be spent oily in
Sp din.
"hird. Use of U.S. dollars by U.S. lnill-
tai y authorities in Spain rather than
the .se dusty counterpart funds.
Fourth. A resale of certain commodity
credits such as cotton by the Spanish
Government made inside Spain at a
pro -fit.
fifth. The proposed giveaway of our
military base at Zaragoza to the Spanish
Gc vernment.
'the United States has other miltary
bases in Spain and the growing tbso-
lea fence of military aircraft prepares us
foi the fate of those bases. One might
prxiict that eventually we will pay Spain
to ;ake them off our hands.
flews stories and editorial comment on
th. fluid Franco position these days. ap-
pe tr often in our newspapers.
The Washington. D.C., Post of Janu-
ar r 28, 1964, tells us that Central Intel-
ligence Agency Director John A. Mc-
Cc ne was in Madrid January 27 "re-
portedly trying to talk Gen. Francisco
Franco out of trading with Cuba."
lid Director McCone suggest that the
Uidted States really does disapprov the
pr )posed $50 million shipbuilding deal
S1 air is considering with Cuba? And
di4 Director McCone mention the Cuban
delegation in Madrid at the same time
which was exploring the possibili y of
ln:reasing imports of electrical hoods
fr, )m Spain.
On January 30, 1964, the Washington
Post carried a story from Barcelona
which appeared in the London Observer
which reported :
Despite U.B. concern. Spain is expanding
her tradewith Cuba.
A 850,000-ton sugar deal worth $81 mil-
lion has been arranged to be paid for In part
with fishing trawlers worth $51 million.
Mr. President, I dislike pointing to the
obvious, but I recall the recent arrest of
Cuban fishing vessels within our terri-
torial waters and I am too well aware of
the nosedive our fish catch has taken.
I doubt that our fishermen will applaud
with glee the news that Cuba is increas-
ing its fishing fleet. The Observer ar-
ticle concludes with this observation:
The whole idea of an economic blockade
to force Castro out of power meets with
skepticism here. General Franco's regime
survived total boycott after the civic war-
without being able to count on the Soviet
bloc to keep it going.
The full spectrum of General Franco's
machinations is described in an editorial
appearing in the February 1, 1964, edi-
tion of the Christian Science Monitor.
I ask unanimous consent that the full
text of "The Caudillo Maneuvers" be
printed in the RECORD at the closeof my
remarks, along with the news Items to
whicb..I.have referred.
The PRESIDING OFFICER. With-
out objection, It is so ordered.
(See exhibit 2.)
Mr. GRUENING. Mr. President, the
word "caudillo" perhaps best describes
the General, for he is a military presi-
dent, and as a military man he seems to
be outflanking the military men of the
United States at every turn.
!From the Nation, Feb. 10, 19641
Examrr 1
SPAIN: ConezALm HANnoUT
(By Lawrence Fernsworth)
("We have poured money Into a non-NATO
Spain, yet we cannot find out from the State
Department how much. ? * ? It Is still a top
secret. * ? ? The American people are en-
titled to know every detail of the Spanish
deal. ? ?
("What Is In that agreement (to maintain
the military bases for another 5 years) is still
unknown to the American people and to most
of Congress. It Is known to account for an
undisclosed amount of military aid to Spain.
? * ' It is very difficult for me to see what
purpose has been served by his agreement
except another lush handout to Spain."-
Senator WAYNE MoasE, during the recent
foreign aid debate.)
Any attempt to assess the extent of the
lush handouts to Spain since 1953, when the
original bases agreements were signed, must
be made in the context of the secrecy thus
described. But enough information has
come from various sources to make it clear
that Spain has already received about $3
billion In aid and probably more, not count-
ing the bases and other military and naval
installations in Spain which are due to be
handed over to the Franco dictatorship in
fee simple and which have cost easily a bil-
lion more. As Senator STEPHEN M. Youxo,
of Ohio, told the Senate, touching this point:
"We have provided economic aid to Spain in
exchange for permission to build our bases
there at a cost of something over a billion
dollars." The major base at Zaragoza, about
midway between Madrid and Barcelona. Is
scheduled to be handed over to Franco this
year. With it go 485 miles of pipeline carry-
ing oil from the U.S. naval base at Rota,
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around the Atlantic corner from Gibraltar. disbursements. A Comptroller General's re- have received heavy grants for both mod-
Senator YOUNG, along with Senator MORSE port in 1961 showed that the U.S. Military ernization and new starts. Some available
and Senator ERNEST GRUENING of Alaska, Advisory Group, instead of drawing on coun- figures show $14,900,000 for modernization of
tried unsuccessfully in the last session to cut terpart, used $178,000 to reimburse its own the Spanish national railways- The Union
all projected aid to Spain by 25 percent. people for living and travel; $6 million in Electrica Madrilefia received $3,900,000 for
The secrecy surrounding American largess wages, mostly to Spaniards, for moderniza- rehabilitation of its hydroelectric system.
to Spain has increased, rather than relaxed, tion of Spanish naval vessels, and $6.2 mil- An electrical switchgear plant received
within the last 2 or 3 years. In 1961, the lion (paid by the Air Force) to a Govern- $350,000. And General Electrica Espafiola
National Advisory Council on International ment-controlled contractor for aircraft received $1,200,000 for its power system.
and Financial Problems showed aid to Spain maintenance. This makes a total of $15.2 How much more has been contributed to
of $1.75 billion. Rather mysteriously, this million passed out unlawfully in Spain be- these and other public utilities has not been
was the last report from that source. cause the Franco government obviously dis- revealed.
Senator FRANK LAUSCHE, of Ohio, dissatis- likes its own counterpart money and demands Spanish steel is another beneficiary in the
fled with the information on Spain provided dollars instead. Such expenditures are hid- lush handouts. The United States spent at
by the Senate Foreign Relations Committee, den under "operations and maintenance" least $55 million on that industry, the money
of which he is a member, sent a request for and do not appear in reports of military or coming from several sources. Direct aid.to
more information to Defense Secretary Mc- other assistance in Spain. the industry to June 30, 1962, has amounted
Namara. Mr. McNamara replied that "since Another source of hidden expenditures is to $8,413,000. Export-import credits for the
1958, the United States has provided Spain the President's contingency and special same period have amounted to $38,100,000.
with a total of $500 million in military as- funds. The contingency fund. was $300 mil- Since 1962, no figures have been allowed to
sistance and a total of $1.4 billion in eco- lion last year. In addition, there was a $300 be known. Spain has also obtained World
nomic aid in the form of defense support, million "military assistance and special au- Bank loans for steel, in large part in U.S.
technical assistance, Public Law 480 (agri- thority" fund which permitted the President dollars. The World Bank does not break
cultural commodities), and Export-Import to draw on Defense Department stocks and down its loans by industries, hence the
Bank and Development Loan funds." services in ways other than are provided by amount for Spain's steel 1s not of record.
Although this total of $1.9 billion exceeds statute. The recipients of these various funds have
the figure in the council's report, it, is far An example of the secrecy in Spanish mat- been five big steel concerns, in each of which
from telling the. story. Senators MORSE, ters insisted upon by the State-Defense com- Spain's Government has an interest.
GRUENING, and YOUNG have not found it con- plex was the hearing in the last session be-
vincing. The available records themselves fore the House Appropriations Suboommit- Faced by
se i mounting Spain, , and andtion to the still more
ospect
show wide gaps. One of these is the coat to tee On Foreign Aid. When Chairman OTTO U.S. the taltruism
bases agreements will ter
minated
the U.S. Treasury of 40-year development PASSMAN pressed Pentagon witness Gen. within that ha Pewars, Dictator is will Franco hasbe-
loans. Another is the writeoff of commodity Samuel K. Eaton about reports that the a few years, Dictator Franco has s credits after their conversion to counterpart ,United States was "tying in a substantial aid a gun 4-year turning development efor program. loans to be usay
funds. program to the new bases agreement," Eaton of of pump primer announced $ By way
Develop went loan funds have been pro- pump prin an announced $5.8 billion
vided to a basis loan whereby un the first a years first tried to brush him off. Failing in that program, he has just negotiated a $150 mil-
he insisted that all amounts mentioned by lion French loan for the further development
are interest free and the next 30 years call him be classified and left blank in the tran-
for annual interest at three-quarters of 1 script. For example, in reply to a direct iron of Spain's steel and other industries. The
percent. The U.S. Government itself pays aueetlon Fn.tri A?~*.,.a,?o.i ? and steel output is to be raised to 4.5
~u yu..,uc?y ~utt~
A loan of $30 million on this basis, by way they expect to receive $------ aid." When The French, unlike the Americans, provide
of example, "would cost the United States pASSMAN asked, "What kind of excess stock no. easy money. Commercial interest rates
$22.5 million if it is ever paid," as Senator will you give to Spain at a cost of $...... ?," are charged, and there are to be reciprocal
GRUENING remarked. Some countries make Eaton replied "The major items are $______." advantages for France. France has a voice
clear to their people that such credits are it Is not very informative, but some light and even a veto in the redistribution of loan
gifts. A table in the hearings of the Senate was cast by Senator YOUNG in the Senate money. One of the aspects of the program
Foreign Relations Committee showed that debate, when he said that Franco "tried to is that France is to collaborate in the in-
of $6.51 billion loaned in this way over a long blackmail us for planes, weapons and equip- stallation of atomic power in Spain. At the
period, only $790 million has been repaid. ment costing between $200 and $300 million." same time, Spain has begun raising tariff
The commodity credit writeoff works as PASSMAN's questioning of Eaton did draw out barriers against the importation of steel, but
follows: The credits consist of cotton, grain, the fact that the Defense Department was with favored treatment for France.
and other agricultural commodities provided planning this year to deliver to Spain five One aspect of the 4-year program is a
at low cost to the recipient country under T-37 aircraft. speedup of farm mechanization. This will
Public Law 480. The recipient pays for these Spain itself is sometimes the source of aid benefit the big landed proprietors; it will
in its own currency, called counterpart funds, information that is classified here. Thus, a further reduce work for the farmhands of
which is placed to the credit of the United recent dispatch tells of a presentation cere- the latifundios of Andalusia and Extrema-
States in local banks and is to be spent in- mony in which several HU-18B antisubma- dura, who already are systematically held to
side the country. There is nothing -to pre- rine war planes were turned over to the near starvation on the theory that chronic
vent a country from printing as much Spanish Air Force.: Spanish crews to oper- hunger keeps them dutiful and helps Franco
counterpart as it needs. ate them 'were trained in this country-at make a showpiece of his "stabilized" coun-
Usually, as now in Spain, there Is more another considerable cost to the American try. The program will also drive thousands
counterpart on deposit than the American taxpayers. of poor tenants off their farms.
authorities know what to do with. For prat- One of the Defense Department's argu- It is evident that, as missiles make the
tical purposes it's another form of handout. ments in support of more money for Spain intercontinental bomber fleet obsolete, the
In Spain, according to the latest available is that the United States makes a big sav- Spanish bases are losing their strategic im-
reports, $445 million worth of commodity ing by training Spanish soldiers instead of portance. Evidence that the whole program
credits have been written off as counterpart. putting American divisions in Spain. It says is petering out is the prospective handing
This, added to the $1.9 billion reported by the cost of maintaining a Spanish soldier for over to Spain of the Zaragoza base and the
McNamara, brings aid to Spain up to $2.34 a year is $522 as against a cost of $3,948 for pipeline. The big question is what will be-
billion, so far as the figures are known. To an American soldier. To which snorts Sena- come of the major naval base at Rota, in-
this add another $100 million announced as tor MoRSE: "That is a typical Pentagon fal- tended to be a permanent rendezvous for
a credit in-conneciton with the renewed bases lacious piece of propaganda." the U.S. 6th Fleet in the Mediterranean.
agreements. Another point raised in Congress concerns The agreements respecting that base's future
But Franco has a further way of making the payment of rental for the Spanish bases, permanent use are, needless to say, exceed-
money out of commodity credits. The House Questioned on this by Senator LAUSCHE, Sec- ingly secret. Will it be a Guantanamo on
Government Operations Committee has retary McNamara replied: the Iberian Peninsula-a source of future
shown that the Spanish Government resold "We do not make any direct payment, misunderstandings between the two coun-
cotton to textile mills at profits of from 50 to in the sense of rental, to Spain. * * * We tries? Spain has given a hint of its right
70 percent. How much grain and other com- have provided military and economic assist- of sovereignty over Rota by refusing to allow
modities were sold at like profits has never ance in accordance with bilateral military V.S. atomic-powered submarines to gather
been made public. If one calculated a 60- assistance and economic assistance agree- there. The real reason for this has not been
percent profit on a reported $700 million in ments. * * * The United States agreed (in told in this country. The fact is that not
commodity credits, that would provide an- 1953) to support Spanish defense efforts for only Spain, but some members of NATO as
other $420 million. agreed purposes by providing military end- well, object to such use. Franco is piqued
Still another facet of the counterpart story item assistance * * * to contribute to the aid because the United States has not succeeded
has been the failure of the U.S. military au- defense of Spain and to improve the equip- in making Spain a regular full-time member
thorities in Spain to use counterpart funds, ment of its military and naval forces. of NATO. He says that since the atomic
as required by law, in payment of internal Spanish railroads and other public utilities fleet is part of NATO, Rota is no, place for it
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to be stationed. The objecting members of
NATO say the same thing.
Franco is unlikely to kick the United
States out of Spain, as has been suggested.
The American presence there in some form
or another is far too Important a source of
strength to Spain's neonazism to 'make
Franco or his successor wish to do that.
But the answer to "What happens next?"
depends on whether America's future policy
toward Spain is to be dominated by the
Pentagon, as now, or by the civilian
authority.
EXHIBIT 2
l From the Washington Post, Jan. 28, 19641
CIA MISSION SER;'e AIMED AT CUBANS
MADRID, January 2'1.-Central Intelligency
Agency Director John A. McCone. taking
what appears to be an unusual role in U.S.
foreign affairs, reportedly is trying to talk
Gen. Francisco Franco out of trading with
Cuba.
Spain is considering a $50 million ship-
building deal with Cuba. The CIA recently
released a report, which has been disputed,
saying that the Soviet bloc was in much
more serious economic difficulties than had
been believed. It suggested that a denial of
economic aid to the bloc would permit the
West to exert powerful leverage.
McCone apparentli is stressing this view
in his talks with Franco Monday and Tues-
day. Although neither American nor Span-
ish sources will discuss McCone's mission. It
is believed that he will talk with other Eu-
ropean leaders after leaving Madrid.
Meanwhile, a four-man Cuban delegation
arrived from Havana to explore the possi-
bility of increasing imports of electrical
goods from Spain.
[From the Washington Poet, Jan. 29, 19641
McCoNE ON Tous c?F Frvz Crrsas IN WEST
E oROPE
John A. McCone, Director of the Central
Intelligence Agency, is visiting live West
European cities to "exchange views on mat-
ters of mutual inte:?est," the State Depart-
ment said yesterday.
McCone left Washington January 18 and
will return January 31, press officer Richard
I. Phillips said. McCone has been in Lon-
don, Paris, and Madrid and will go to Berlin
and Rome, he said.
The State Department spokesman made
the announcement after reports were pub-
lished from Madrid that McCone was trying
to talk Gen. Francisco Franco out of a big
shipbuilding deal with Cuba.
Phillips said McCone is accompanied by
his wife.
[From the Washington Poet, Jan. 36, 19641
CUBA TRADE EXPANDED BY MADRID
BARCELONA.-Despite U.S. concern. Spain
is expanding her trade with Cuba.
A 350,400-ton sugar deal worth $81 mil-
lion has been arranged to be paid for In part
with fishing trawlers worth $51 million.
Some U.S. Government officials have hinted
at a possible suspension of American aid.
In reply, the state-controlled Spanish press
accuses the United States of hypocrisy and
stresses Spain's historic links with Cuba.
Spain still pays lip service to fascism and
jails not only Communists, but also So-
cialists and even Christian Democrats. Yet
it is on good terms with Cuban Premier Fidel
Castro partially because the key economic
positions In Spain since 1958 have been held
by men whose aim Is to eliminate Ideology
iiom politics.
sTABILt';ED ECONOMY
These technocrats are all member-, of the
opus Del (God's Work) lay order, a power-
ful body whose ends are not exclusively rell-
g,ous. They have managed to stabilize the
economy, through the tourist trade and a
strict policy of austerity. The 5-year pifn
of del elopment. which Is just getting undor-
way, s their brainchild.
Spt fn's growing industry needs outlets.
and rhnba-1s a customer.
For years Spain has been doing good busi-
ness with Eastern Europe. Since 102.
Polar d and Czechoslovakia have had star do
at the international trade fair In Barcelont-
despi.r initial protests from the Falan.le,
Spate's only legal political party.
Th. Spanish consulate in Bern Is one of
the 1 usiest In Europe. It handles all the
trade with the Soviet Union.
Th ? Barreiros motor works, which est4.b-
lishet a linkup with Chrysler last year, is
sending trucks and tractors to Communist
NO PROTEST MADE
No ie of this has ever given rise to p ?o-
test roan the United States.
IAv t year, exports to Cuba amounted to
$12 rillilon, 1.7 percent of Spain's total ox-
ports Spain Imported mainly sugar, to-
bacci and rum. She exported rice, lentils.
potatoes, paper, football boots, wine, olive
oil. sum cauldrons and grapes.
In the last few weeks. Cuban trade com-
missl ant have visited Spain to negotiate the
pure:iase of electric trains and machinery.
They have taken home several million dol-
lars' worth of books and a substantial con-
stgnr lent of eggs.
Undeterred by the American "blacklint "
marl .ime companies do business with Cuba.
whim the airlines linking both countries
carrl the majority of passengers traveling
to ai d from Western Europe.
The whole idea of an economic blocklde
to f. erce Castro out of power meets with
sleep deism here. General Franco's reg:me
surv-ved total boycott after the civil war-
with nut being able to count on the So-let
bloc to keep it going.
I Fro n the Christian Science Monitor, Pet'. 1,
19641
THE CAUDILLO MANEUVERS
'rte Spanish Caudillo is playing a dipio-
mati, game in some ways like that of the
Fran ti President. Not that General Franco
is de [lying with Communist China: he is not
quit that much up to date. His flirtations
are x -nth the Soviet Union and Cuban Preriler
Fide Castro. The Spanish willingness to
buiiri ships for Cuba has now been well pub-
iiciz A. Less note has been taken, however,
of hints of a possibility of the opening, of
dipl" "matic relations between Madrid and
Mos, ow. At a New Year's reception in Paris,
the Soviet Ambassador reportedly toasted the
Spal:lsh Ambassador with the remark: "To
the istablisbment of diplomatic relations be-
twec n Spain and the Soviet Union."
G-neral Franco's gestures In the direction
of Si avana and Moscow can be explained, like
som i of General de Gaulle's moves. as a r:ac-
tion to U.S. policy toward his country. :last
year. the Spaniards failed, despite strenuous
efoi ts, to get extra concessions from W.ish-
ingt nn as the price for renewing the agree-
met t on American bases in Spain. One of
Macrid's most earnest desires was for ad/nla-
sion to the North Atlantic Treaty Organiza-
tion: but the United States got the base
agru ement renewed without arranging oven
the' for the Caudillo.
Q.Iietly, It seems, General Franco Is now
has ng his revenge. Yet his domestic prob-
lem puts him in a much more delicate loosi-
tior within Spain than that of General do
Gat lie in France. To begin with, the latter's
mot iiiied authoritarianism carries witi it
few of the liabilities of the Caudillo's stiffing
and sometimes harsh dictatorship. l'res-
eur'f against the Franco regime have `seen
but ding up for a long timeeven among
thou who have no desire to take Spain Iny-
whI re left of center.
Ti many Spaniards. the failure of General
Franco to get what be wanted from Wash-
Ington was a failure of Opus Del, a secret
organization of rightwing Catholic laymen
which has won control of several key posts
around the Caudillo. Its critics say it is
much more concerned with the economic
well-being of the class it represents than the
social progress of the country as a whole.
These critics are naturally of the left-of the
left, that is, In a Spanish. not a Marxist sense.
General Franco's gestures toward Moscow and
Havana might well be intended to spike their
guns. as well as to spite Washington.
PRESIDENT JOHNSON SEEKS TO
PROTECT HOMEOWNERS AGAINST
SHODDY CONSTRUCTION
Mr. GRUENING. Mr. President, the
housing message sent to the Congress
this year by President Johnson recom-
mends that authority be provided for the
FHA and the VA to finance the correc-
tion of substantial deficiencies.
This recommendation puts meaning
into the words "FHA-Insured." It gives
to American home consumers a long-
overdue protection against the major
defects they may find in homes which
are purchased through the FHA or the
VA.
It embodies the sense of the language
I and others of my colleagues have pro-
posed in the 87th and 88th Congresses,
In S. 3460, which I introduced in the
previous Congress, and S. 1200 which I
introduced on March 28, 1963.
This is a wonderful victory, one which
truly brings hope to millions of home-
owners. The protection for the con-
sumer which I have proposed is em-
bodied in S. 2468.
President Johnson is to be highly com-
mended for his forthright attack against
the housing inequities and problems
which confront far too many citizens of
this land,
Senate bill, S. 2468, introduced by the
distinguished junior Senator from Ala-
bama [Mr. SPARKMAN] contains the pro-
posed amendment to section 204, title V,
of the National Housing Act to which
I have referred which will, In large meas-
ure, restore the faith of the consumer
in the words "FHA-Insured.., Its title is
?Expenditures To Correct or Compen-
sate for Substantial Defects in Mort-
gaged Homes."
I ask unanimous consent that the text
of this proposed section be printed in the
RECORD at this point in my remarks.
There being no objection, the section
was ordered to be printed in the RECORD,
as follows:
CORRECTION OF SUBSTANTIAL DEFECTS IN
MORTGAGED HOMES
SEC. 204. Title V of the National Housing
Act is amended by adding at the end thereof
the following new section:
"EXPENDITURES TO CORRECT OR COMPENSATE FOR
SUBSTANTIAL DEFECTS IN MORTGAGED HOMES
"SEC. 517. (a) The Commissioner is au-
thorized, with respect to any property im-
proved by a one- to four-family dwelling
approved for mortgage insurance prior to
the beginning of construction which he finds
to have structural or other major defects
affecting the livability of the property, to
make expenditures for (1) correcting such
defects; (2) paying the claims of the owner
of the property arising from such defects;
or (3) acquiring title to the property: Pro-
vided, That such authority of the Commis-
sioner shall exist only (A) If the owner has
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CONGRESSIONAL RECOR J lI
requested assistance from the Commissioner
not later than four years (or such shorter
time as the Commissioner may prescribe)
after insurance of the mortgage, and (B) with
respect to property encumbered by a mort-
gage insured under this Act after or not
more than three years prior to enactment
of the Housing and Community Development
Act of 1964.
"(b) The Commissioner shall by regula-
tions prescribe the terms and conditions
under which expenditures and payments may
be made under the provisions of this sec-
tion, and his decisions regarding such ex-
penditures or payments, and the terms and
conditions under which the same are ap-
proved or disapproved, shall be final and
conclusive and shall not be subject to judi-
cial review."
Mr. GRUENING. Mr. President, Pres-
ident Johnson, in his housing message,
calls attention to the fact that "the part-
nership between. private industry and
Government-exemplified by Federal
guarantees and insurance of private
housing credit-has made possible good
housing and widespread homeowner-
ship for millions of our citizens."
The President says:
I intend to encourage-through legislative
proposals, where necessary-even more effec-
tive cooperation between Government and
industry for the joint benefit of homeowners,
tenants, and the industry itself. To this end,
I am proposing a number of modifications
in the statutes governing our self-support-
ing mortgage insurance and marketing pro-
grams which will improve their efficiency and
usefulness. Among these will be the follow-
ing proposals:
(1) To provide relief in those isolated cases
in which, despite the care exercised by build-
ers and the Federal Housing Administration
and the Veterans' Administration, substan-
tial defects develop in new construction they
have approved, I recommend that authority
be provided for the FHA and the VA to fi-
nance the correction of substantial deficien-
cies.
(2) To make certain that no legislative
barriers exist to discourage or prevent mort-
gage lenders and the Federal Housing Ad-
ministration from cooperating to help delin-
quent mortgagers in deserving cases, I rec-
ommend that FHA's claim and forbearance
authorities be amended to encourage the
temporary withholding ' of foreclosures
against homeowners who default on their
mortgages due to circumstances beyond their
control.
(3) To expand our concerted effort to sub-
stitute private credit for Federal loans, I
recommend provision of legislative authority
for the pooling of mortgages held by the
Federal National Mortgage Association and
the Administrator of Veterans' Affairs, and
the sale of participations in such pools.
This is good and heartening news to
the U.S. home buyer.
The need to make the words "FHA in-
sured" mean what they say were vividly
and heartbreakingly brought to my at-
tention by some.50 homeowners living in
a new FHA-approved home construction
development named Eagle River Heights,,
near Anchorage, Alaska. Their homes,
their FHA-approved dwellings had nu-
merous major and minor defects. They
ranged from buckling wall paneling, to
inadequate heating facilities, to the use
of second hand pipe for plumbing, and to
improperly installed storm doors and
windows- to name but a few flagrant
shortcomings.
When this situation was brought to my
attention by the properly indignant
home purchasers in January 1962, I went
to work to see what could be done.
Subsequently, after a thorough exami-
nation of the incriminating evidence,
evidence so clear that one could hardly
overlook it, I introduced on June 21,
1962, S. 3460, a bill to put meaning into
the words "FHA insured."
The bill received favorable comment
and was endorsed by then Federal Hous-
ing Administration Commissioner Neal
J. Hardy.
And the defects in the Eagle River
homes were corrected, thanks to the posi-
tive action of FHA officials. They de-
serve the highest acclaim for their
prompt and effective remedial steps, an
attitude which unfortunately is not
found in all Federal agencies. The cost
of repairs totaled $100,000.
In the months which have ensued since
I introduced on March 28, S. 1200-to
obviate similar deficiencies throughout
our Nation-identical to S. 3460 of the
87th Congress-I have received many let-
ters urging enactment of the bill. Eleven
of my colleagues, representing various
areas of this Nation have joined as co-
sponsors. They are the junior Senator
from Minnesota [Mr. MCCARTHY], the
senior Senator from Nevada [Mr. BIBLE],
the senior Senator from Pennsylvania
[Mr. CLARK], the senior Senator from
Connecticut [Mr. DODD], the senior Sen-
ator from Illinois [Mr. DOUGLAS], the late
senior Senator from Tennessee [Mr. Ke-
fauver], the junior Senator from Mon-
tana [Mr. METCALF], the senior Senator
from Oregon [Mr. MORSE], the junior
Senator from Utah [Mr. Moss], the jun-
ior Senator from New Jersey [Mr. WIL-
LIAMS], and the junior Senator from Ohio
[Mr. YOUNG].
Hearings.were held October 17 and 18,
1963, on S. 1200 and a similar bill, S.
2226, introduced by my able colleague
from New York [Mr. JAVITS]. They were
presided over by Senator SPARKMAN, the
able chairman of the Senate Banking
and Currency Subcommittee on Housing.
The need for such legislation was ex-
plored and documented in detail.
The knowledgeable and capable Ad
ministrator of the Housing and Home
Finance Agency, Dr. Robert C. Weaver,
told Chairman SPARKMAN that the Hous-
ing agency "recommends enactment of
legislation to correct major defects in
property the homeowner has purchased
with the assistance of FHA mortgage
insurance."
Today we see the work of various in-
dividuals, the identity of some of whom
we will never know, bearing fruit. Their
efforts mean the homeowners of America
may be better served.
Perhaps the testimony of Arthur M.
Watkins, a professional writer, author
of books and magazine articles about
housing and homebuilding, best sums up
the reasons for this type of consumer
protection. Let me quote from the con-
clusion of his remarks during the hear-
ing:
Mr. WATKINS. I have one other point to
make. I think a bill such as Senator GsuEN-
ING'S will actually be good for builders, the
whole building industry, and everybody, be-
cause it could well result in more sales of
new houses.
Many people today do not buy new houses
or are hesitant about buying because of fan-
2365
tasies in their mind and suspicions. Whether
ill founded, or for one reason or another,
they nevertheless are suspicious of new
houses. They, therefore, will not buy, when
in many cases they want to buy, a new
house.
If they could be assured absolutely that the
house is guaranteed, I think this could be
good for everybody. It would sell more
houses for builders. It could be a tonic for
the entire industry as well as the country.
Another question raised in opposition to
the bill is that some people claim that cases
of defective houses are very rare and isolated
cases. If that is true, then carrying out
this bill, administering it, and running it, will
be a simple matter.
I noticed another thing in the Washing-
ton Post today, an article saying, "Builders
Criticized on Obsolete Methods."
Here I would like to speak up in defense
of the builders. It is on page 6 of October
18, 1963, Washington Post. It says, in effect,
that the builders are always the villains and
that every time there is a bad house or a
high-cost house, blame it on the builders.
As I said before, we. should not overlook
the fact that again it is the "system." No
single builder, however bright, smart, or
experienced, can know everything there is
about heating, wiring, cement, framing, and
so on, that goes into his houses. That is why
a large builder like Bill Levitt will have a
staff or 15 or 20 topflight architects and
engineers. But very few builders can afford
such staffs.
When I testified before the Senate
Housing Subcommittee I said that I was
not concerned with the mechanics of se-
curing protection for homeowners as well
as the homebuyers. I said:
My concern is that the protection be avail-
able to both and that it be made available as
quickly as possible.
Pride of authorship in this legislation is
incidental, but pride in the integrity of our
Government is paramount.
I urge that this subcommittee take action
to restore the consumer's faith in Govern-
ment by making certain that the words "FHA
insured" truly mean the same to all persons.
We have taken another important step
along the road toward restoring the con-
sumer's faith in Government with the
introduction of S. 2468, which embodies
the recommendations made by President
Johnson.
But legislative history being written
has not been confined to the efforts of
the Senators to whom I have referred.
The history has been written, too, by
Members of the other body. They are
Representative ALBERT RAINS of Ala-
bama, Representative BENJAMIN POSEN-
THAL, of New York, and Representative
JAMES ROOSEVELT, of California.
We are moving ahead and are stronger
for this reaffirmation of good govern
m t.
PRESIDENT JOHNSON SUPPORTS
ISRAEL'S RIGHT TO ITS SHARE OF
THE JORDAN'S WATERS
Mr. GRUENING. Mr. President,
President Johnson deserves the highest
commendation not only of the people of
the United States but of the world for
his most recent practical steps to bring
peace to the Middle East. In that
troubled crossroads of the world, water
is the essence of life.
The recommendation of the Eric
Johnston Committee was that the waters
of.the historic Jordan be divided on an
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2366 C,ONG I SSl N L RECORD -SENATE February 7
equitable basis between Israel, Syria.
Jordan, and Lebanon. Israel, following
this recommendation, has made prepara-
tions to divert to its and lands a just
portion of the waters of the Jordan.
Yet, despite thc- reasonableness of
Israel's actions, the leaders of the Arab
nations meeting recently in Cairo, and
still pursuing relentlessly their determi-
nation to drive Israel into the sea, have
made threats against that little nation
if it persists in diverting even those
waters recommended by the Johnston
Committee. This :s all the more un-
justifiable since Joidan has already di-
verted water for the East Ghor irriga-
tion project-a protect financed in part
by the United States under our foreign
aid program.
Yet, here is Israel, of all the lands In
that area, the true-and only-bastion
of democracy, forced to spend an exces-
sive amount of its sparse resources III
order to purchase arms to be ready to
defend itself, and still planning to spend
of its remaining reduced resources to
irrigate its desert lands with the waters
of the Jordan, yet threatened with
armed violence by its far more populous
neighbors if it should carry out its
plans.
President Johnson's forthright and
enlightened statement yesterday in New
York provided much needed reassurance
to Israel that it can carry out Its plans
with the comforting knowledge that in
this proper peaceful pursuit it can count
on the support of the United States.
President Johnson's, characterization of
the uses of water Is most appropriate.
He said: "Water should never be a cause
of war-it should always be a force for
peace."
In that spirit President Johnson of-
fered to cooperate with Israel and the
other nations in the Middle East to do
research to turn salt water into fresh.
With characteristic initiative, Israel has
been working on this important project.
I sincerely hope that the nations of
the Middle East will at long last beat
their spears Into plowshares and cooper-
ate one with the other to make green
again their vast sandy wastes. It is
high time that the Arab nations ceased
their aggressive warmongering tactics
which keeps the Middle East in a fer-
ment, and adopted instead a policy of
"live and let live." If they were wise
they would, instead of plotting cease-
lessly to destroy Israel, instead emulate
it and adopt a policy for their own peo-
ple of education, Irrigation, and sanita-
tion.
I ask unanimous consent that excerpts
from the account in the New York Times
of February 7, 1964, of President John-
son's statement on water development III
the Middle East be printed In the RECORD
at the conclusion of my remarks.
'there being no objection, the article
was ordered to be printed in the RECORD,
as follows:
JOHNSON PLEDGES Isi:AEL WATER AID WITH
ATOM POWER-TELLS GROUP HERE UNITED
STATES HAS OFFERED To POOL RESEARCH TO
EASE MIDEAST CRISIS
(By Homer Bigart)
President Johnson disclosed last night that
the United States had offered to cooperate
with 'arael in using nuclear power to help
solve he water shortage in the Middle East.
Isra -i has indicated she will divert water
from he Jordan River to meet her needs--a
project that threatens war between Israel
and ti e Arab States.
Mr. Johnson said this country had begun
discus lions with representatives of Israel on
coupe atlve research to turn salt water into
fresh pater by the use of nuclear power.
The President. speaking in the Waldorf-
Astorir at the annual dinner of the Ameri-
can Committee for the Weizmann Institute
of Set' nce, did not mention Israel's projected
divers on of water from the Jordan. He did
stress, however, the importance of finding a
peacesui solution to the recurrent crisis.
PRIORITY FOR PEACE
"WI ter should never be a cause of war-
it should always be a force for peace," the
Presid ant solemnly told more than 1.7)0
guest. And he added: "Peace is first on air
agend i
Lass night in the ballroom of the Waldorf
Astor) i the President was cheered for t is
sympt thetic references to Israel.
WATER OFFER WIDENED
The President hastened to add that the
Anted an offer to cooperate with Israel in a
searct for ways to turn salt water Into fresh
water was also open to "other countries,"
presu, iably Israel's Arab neighbors.
"Wt are equally ready," he said, "to c)-
operate with other countries anxious to cure
water shortages. This would be part of a
genera I program for pooling experience and
knowledge In this Important field. The LI-
ternat lonaf Atomic Energy Agency Is a focal
point II this program.
"In this way we can demonstrate the con-
struct ve meaning of man's mastery of the
atom. We can pool the intellectual resources
of Isr Icl. America and all mankind for t:Ie
benefit of all the world. And we can better
pursue our common quest for water."
The discussions with Israel mark the first
joint venture of the United States and a:i-
other country In Important desalinization
research.
The President warned that the project WAS
di?cu t..
"1 1 romise no early and easy results," he
said. "But the opportunities are so va;it.
the stakes are so high, It Is worth all air
effort: and all our energy."
COM'ENSATORY PAYMENTS, SOUND
AGRICULTURAL POLICY
Mr HUMPHREY, Mr. President, the
Janui.ly 8, 1964, issue of the American
Farm Bureau Federation Newsletter ca:-
ried atn article entitled "Compensatory
Payments To Be Issued in 1964 Farm De-
bates " Recently I addressed the meni-
bersh.p of the Farm Bureau at its all-
nual t onvention in Chicago. I know how
seriot sly the Farm Bureau reviews Its
polio} statements and the importance it
attac'res to them.
In .ny address I spoke of many factors
affecting agriculture, Including my pro-
posal for wheat embodied in S. 2258. My
whea' bill provides for deficiency or com-
pensatory payments under specified con-
ditions. The American Farm Bureau
Federation statement on compensatory
paym Ints deserves respectful and objec-
tive a ialysis.
I h;.ve examined each of the Farm Bu-
reau arguments as related to S. 2258.
Also. 1 have analyzed the Farm Bureau
position on compensatory payments n
light ,f policy positions enunciated with
respe'-t to other areas of agriculture from
the at endpoint of consistency.
First, it should be noted that the Farm
Bureau proposes the following guidelines
for measuring policies for agriculture,
and I quote:
Policies affecting agriculture should in-
crease economic opportunity for farm peo-
ple; promote efficiency In the farm business;
protect the competitive principle; be con-
sistent with the law of supply and demand:
strengthen the market system: stimulate
market expansion; encourage soil and water
conservation.
Policies affecting agriculture should not
open the way to price fixing: stimulate ex-
cessive production; permit development of
monopolies; erode individual freedom; freeze
historical production patterns; encourage
use of synthetics or other substitutes; shift
adjustment burdens from one producer group
to another; Increase farm production costs;
make farmers dependent on Government
payments.
If farm people are to enjoy freedom, we
must accept the discipline of competition.
We reaffirm our desire to move as rapidly
as possible to the market price system.
Second, the Farm Bureau indicates
support of the present peanut, tobacco,
and rice marketing quota programs,
Support also is given to the present type
of sugar program with the overall rec-
ommendation that a larger percentage
of the growth in sugar consumption be
reserved for domestic producers.
Third, the Farm Bureau supports the
Agricultural Act of 1958 as related to
cotton, including marketing quotas and
price support of 30 cents a pound for
1964 crop cotton and thereafter at 90
percent of the preceding 3-year average.
Fourth, the Farm Bureau recommends
that farmers not be forced to compete
with the Commodity Credit Corporation
for markets. The Farm Bureau recom-
mendation states, and I quote:
The original purpose of commodity loan
programs was to avoid glutted markets at
harvest time and to encourage orderly mar-
keting throughout the year.
Government owned surpluses should not
be released for unrestricted domestic use at
prices representing less than 115 percent of
support levels, execept as offset by compara-
ble purchases in the open market.
By permitting the market price system to
function, this policy will provide farmers
with a better economy and more effective
markets.
Fifth, there Is a statement on private
competitive enterprise, as follows: "We
believe in a competitive business environ-
ment In which supply and demand are
the primary determinants of market
prices, the use of productive resources
and the distribution of output."
Sixth; with respect to compensatory
payment, the Farm Bureau policy state-
ment reads as follows:
Compensatory payments are proposed in a
variety of forms. Regardless of form, this
approach Is unsound and dangerous to our
economic and political system. It would
stimulate production, increase unit costs, de-
press market prices, necessitate tight produc-
tion controls, and make farmers dependent %
on congressional appropriations for much of
their total Income. It also would be ex-
tremely costly.
Increasing costs would Invite limits on
payments to Individuals, and this would
place a ceiling on opportunity.
Payment programs mislead the buying
public with respect to the value of farm
products, as a part of the real cost is paid
through taxes rather than at the store.
Approved For Release 2005/01/27 : CIA-RDP66B00403R000200170123-4