HARD CHOICES IN VIETNAM

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April 14, 1966
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April 14, 1966 Approved For Release 2005/06/29: CIA- 0446R0004000600093 CONGRESSIONAL RECORD -- SELN 7773 'Act. Twenty-two Republican Senators and eighty-three Republican Members of the House are sponsoring such legislation. All 12 members of the joint Senate-House Re- publican leadership are included in this number. The purpose of the Human Investment Act is to encourage industry to expand its training programs so that the reservoir of available job skills more closely matches the present and anticipated needs of the econ- omy. Private enterprise today is the Na- tion's largest job trainer, investing about $4.5 billion a year in the various forms of employee training. Over the years, labor and business have shown that they know best what skills will be needed in the econ- omy and what kinds of training will best prepare workers to accept the jobs that be- come available. It is the goal of the Hu- man Investment Act to provide the type of economic climate through tax incentives which will permit business to enter this field on a major scale. Unskilled workers today have an unem- ployment rate twice as high as the overall national rate. In most cases, the unskilled lack only the training necessary to permit them to move into existing vacancies. The problem is a national one and de- mands a national solution. The Republican Party believes that the Human Investment Act is a proper, indeed, necessary, response. This legislation will guarantee an expan- sion of worthwhile and needed training pro- ? grams, such as apprenticeship and on-the- Job training, while holding redtape and ad- ministrative regulation to a minimum. The enactment of this Republican-authored leg- islation would be a major step toward en- couraging our American enterprise system to expand its continuing efforts to alleviate the Nation's manpower shortages and en- hance the opportunities for the individual worker to share more fully in the benefits of the American economy. HARD CHOICES IN V:ETNAM Mr. JAVITS. Mr. President, I ask unanimous 'consent that I may proceed for 3 additional minutes. The ACTING PRESIDENT pro tem- pore. Without objection, it is so ordered. Mr. JAVITS. Mr. President, the pres- ent turbulent political situation in South Vietnam makes it incumbent upon us to discuss once again U.S. policy in Viet- nam and the extent of our commitments there. The people of the United States must be prepared for the hard choices and decisions which may be required of us as a result of the existing political uncertainty. Our own purpose should remain un- altered. Side by side with the ARVN forces of South Vietnam, U.S. troops are waging a struggle for high but limited objectives with the necessary but limited military means. We are seeking a ne- gotiated settlement to preserve freedom of choice for Vietnam. Our goals are threefold: First, pacification of the im- portant and populous areas; second, eco- nomic and social development of the Vietnamese people; and, third, the hold- ing of free elections in order to enable the Vietnamese to determine their own governmental future. Should the Government of Premier Ky remain in office, or should another government with the same plans for Vietnam assume power and responsi- bility, the United States can continue to play its part in Vietnam. Should, how- ever, a government come into office which is dissatisfied with our help, or with the presence of our forces in the coun- try, or which is unable to continue the South Vietnamese share of the military burden, then we will have to decide whether to first, persist nonetheless and virtually take over the governmental op- erations in South Vietnam; second, with- draw our troops from the Asian main- land; or, third, redeploy our forces to another Asian location. If we are so forced to reappraise our position, I urge that we do so in light of our basic policy to date?that is, we are in Vietnam because the actual gov- ernment and people of that country wish to wage a struggle for their independence and freedom and they desire our help. In no event should the struggle there be a struggle carried on by us without South Vietnam, for it is at their behest that we are helping to defend them. It must be said at once?and I pay tribute to them? that the ARVN forces are carrying a heavy burden in the conflict. Indeed, their casualties are six times our own, grievous as are our own. Just as I oppose carrying on the effort in Vietnam by ourselves, I also reject complete withdrawal from the Asian mainland. There are still a number of nations in that area which need and de- sire our help. The Chinese Communists still vow tc persist in their so-called wars of aggression which they call wars of na- tional liberation. Should conditions force us to leave South Vietnam, I believe that our best c oice is to redeploy our troops to another Asian country. It is my view that our forces should not be broken up, but should be kept together as an effec- tive unit and redeployed where they can be available to counter any new aggres- sive move by Communist China. North- ern Thailand is so threatened, and should the Government of Thailand request such assistance, I believe that at least some of our troops ought to be restationed there. One question must be asked: "What would be the effect if we have to do so, not out of choice, of U.S. withdrawal from South Vietnam on our other inter- national commitments?" I believe that the United States will already have amply justified by what we have done to this point in South Vietnam?that we are prepared to back our commitments elsewhere. No one could have any right to doubt that we are ready, notwith- standing the difficulties in money and manpower, to support the cause of free- dom. Every free nation in Asia and else- where in the developing world already has been heartened by our determination. In these efforts, howeve'r, we cannot guarantee Success; we can only guarantee the effort itself. It would have been, and would be, disastrous voluntarily to pull out of Vietnam, but it is no disgrace if conditions make our continuance there unwelcome or untenable. Yesterday, I uttered these same thoughts in a series of speeches in the north country of my own State, and as I have noted that other Senators spoke yesterday, I desire to add my voice to theirs in this, the national record. AMENDMENT OF VARIOUS PROVI- SIONS OF LAWS ADMINISTERED BY FARM CREDIT ADMINISTRA- TION Mr. LONG of Louisiana. Mr. Presi- dent, I ask unanimous consent that the Senate proceed to the consideration of Calendar No. 1069, S. 2822. The ACTING PRESIDENT pro tem- pore. The bill will be stated by title. The LEGISLATIVE CLERK. A bill (S. 2822) to amend various provisions of the laws administered by the Farm Credit Administration to improve operations thereunder, and for other purposes. The ACTING PRESIDENT pro tern- pore. Is there objection to the present consideration of the bill? There being no objection, the Senate proceeded to consider the bill, which had been reported from the Committee on Agriculture and Forestry, with an amendment, on page 4, after line 3, to strike out: SEC. 4. Sections 41 and 34 of the Farm Credit Act of 1933, as amended (12 U.S.C. 1134c and 1134j), are each amended by strik- ing from clause (a) in the first sentence thereof the following: ", for any of the purposes and subject to the conditions and limitations set forth in such Act, as amended". And, in lieu thereof, to insert: SEC. 4. (a) Sections 41 and 34 of the Farm Credit Act of 1933, as amended (12 U.S.C. 1134c and 1134J), are each amended? (1) by striking from clause (a) in the first sentence thereof the following: ", for any of the purposes and subject to the con- ditions and limitations set forth in such Act, as amended"; and (ii) by adding the following sentence im- mediately after the first sentence thereof: "Loans to cooperative associations made by any bank for cooperatives shall bear such rates of interest as the board of directors of the bank shall from time to time determine with the approval of the Farm Credit Ad- ministration, but in no case shall the rate of interest exceed 6 per centum per annum on the unpaid principal of a loan.". (b) The Agricultural Marketing Act, as amended, is amended by deleting subsection (a) of section 8 thereof (12 U.S.C. 1141f (a) ). So as to make the bill read: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the laws administered by the Farm Credit Ad- ministration relating to Federal land banks, Federal intermediate credit banks, banks for cooperatives, farm credit board elections and compensation of Federal Farm Credit Board, are amended as hereinafter provided. FEDERAL LAND BANKS SEC. 2. Title I of the Federal Farm Loan Act, as amended, is amended? (a) by adding the following subsection at the end of section 10 thereof (12 U.S.C. 751-- 757) : "(h) To the extent authorized by the Farm Credit Administration, the Federal land bank of the district, and the board of directors of a Federal land bank association, a writ- ten report and approval by the manager or another employee of the association desig- nated for the purpose shall be acceptable in lieu of the written report and approval otherwise required of the loan committee under this section; and in such cases the favorable report and approval by the man- ager or other employee shall constitute the applicant a member of the association." Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 CONGRESSIONAL RE( ORD ? SENATE tiy inserting immediately before the at the end of peragraph First of see- thereof (12 U.S.C. 771 First) and DIEU lately before the period at the end of ttie sentence and immediately before the eecond comma in the second sentence of parm7neth Second of EeCti011 3 thereof (12 tdr.Il lecond) the fellowi 11 "and which eitirireityis may include farmland within ether farm credit districts to the extent atilhoreied by the Varna Credit Administra- tion" deI by striking "end :unless owners of ell-tek in the corporation assume personal liability for the loan to the extent it:equired tinder funs and regulations prescribed by 1hE I FT1 Credit Administration" Irons the (mirth sentence of paragraph Sixth of section 12 thereof (12 U.S.C. 771 Sixth); and lty substituting "an amount specified the Farm Credit Administration" for ee Doe" in paragraph Seventh of section 12 tit:a:got (12 U.S.C. 771 Seventh). Fnsa. I DI' ['ERNI I 31 IATE CREDIT BANKS ft Title IT of the Federal Farm Loan erie eri amended, is amended-- (a) iti section 202(a) thereof (12 U.S.C. 1.0311, by deleting "and" at the end of para- graph (2) , by substituting "; and" for the period at the (mei of paragraph (3) and by adding, the following new paragraph: 'Trio to purchase for investment obliga- arms re the Federal land banks and the liniks for cooperatives and, to the extent authorized by the Farm Credit Administra - iris], obligations of- any agencies of the Canted States."; and ( b) by changing section 205(h) thereof (12 11.2 C. 1092) to read as follows: "The 1,arre Credit Administration may require res. pone in stich form as it may specify from any illof Ilie Federal intermediate credit tetine whenever in its judgment the same areiiEEC scary Inc a full and complete know]. teign of its or their financial condition or IIANKS FOR COOPER.AFIVES . ill Sections 41 and 34 of the Farm credit Act of 1933, as amended (12 U.S.C. nele and 11341), are each amended? (it by eliriking from clause (a) in the first ter/at-hi, thereof the following: ", for any the purposes and subject to the condi- tione ;nal limitations set forth in such Ant, at zone:vied"; and it) lay adding the following sentence imss: nhiliotety after the first sentence thereof; :o cooperative associations made by ly bet iv for cooperatives shall bear such rates of interest as the board of directors of Lim ba WI shall from time to time determine with the approval of the Farm Credit Admin.. ii).; w. but; in no case :Mall the rate of in- Lermi, exceed 6 per centum per annum on the unpaid principal of a loan.". (b1 The Agricultural Marketing Act, as emended, is amended by deleting subsection (a) t secnon It thereof (12 U.S.C. 11411(a) AVM Si CB EDIT BOARD ELECTIONS :I!0 The Farm Credit Act of 1937, as emenden,is amend.ea by substituting "sixty" the "thirty" in the last sentence of section lint) thereof (12 U.S.C. 640e) and in. the tis ird lied sentence of section 5(0 thereof -12 U.S.C. 640f) and by inserting the follow- C IZDNUICIIII.Lely before the period at the end of each of such sentences: ", except that for elections to fill vacancies the Farm Credit Administration may specify a shorter period than sixty days but not less than thirty days". 'this section shall be effective after 111.e e:11.endar year in which it is enacted. EEDERAL FARM CRFIDIT BOARD . 6. Section 4(f) of the Farm Credit Act or 5153 (12 U.S.C. (1:16c(f) ) is amended by substituting "$100" for "$50" therein. The amendments were agreed to. The bill was ordered o be engrossed for a third reading, was read the third time, and passed. Mr. LONG of Louisiarla. Mr. Presi- dent, I ask unanimous (-:f:nisent to have pri.nted in the RECORD a I, this point an extract from the repor 1 accompanying the bill. 9The1'e being no object in, the extract oi ale report (No. 1102) was ordered to be printed in the REeoan as follows: Ex I' ANATION OF BILL ( '1TH COMMITTEE AMENDMENT EFDERA L LAND E A NIKE; Prick:ground: The 12 Federal land banks, D each farm r dis: riot, were estab- lishort in. 1917 to make long -term land mort- gage loans to farriers and ranchers as pro- vided in the Federal Farm Loan Act. Each borrower from a Federal land bank is re- quired to become a member of the Federal land bank association through which his loan is made. The, borrower buy., capital stock of the association in an amour: I; equal to 5 per- eel] ti of the face amount of the loan and the association is required to perchase an equal amount of stock in the Federal land bank of the district. By this meaLs all the capital stock of the '719 Federal land bank associa- tions is awned by their fanner members and assc,ciations in turn have owned all of the stock of the Federal land l,:inks since 1947 when the last; of he Goverament capital in the banks was retired. The :oan funds of the Vecteral land banks are obtained primarily through, the sale of consolid:tted bonds to the investing public. A Federal land Lank loan must be secured by a float mortgage on the rIam or ranch of the borrower. The amount loaned in any case 1na.y not excged 55 percent of the ap- praised normal value of tie:, farm or ranch 05e,e51 as security, plus the amount of the it,,;' Ii required to be purcha.:ed (5 percent of the face amount of the It in) Since the banks obtain their loan funds chiefly through the sale of consolidated bonds to the invest- ing public, interest on loan; made to farm- ers varies with the cost of money and dif- ferenees in admintdrative cost. At the pres- ent time, 11 of the banks are making loans at alt, percent; and one charges an interest rate of 5.2 percent. There is o statutory limit of ts; percent. A land bank loan may not be made for more than 10 ye rrs but most of them have maturities of 20 to 35 years. Pres- ently there are sone 384,000 land bank loans outstanding in the approximate amount of $4.3 billion. Section 2(a): To obtain a Federal land bank loan, an application is .-tubmitted to the bank through the local Federal land bank as- sociation. Before a loan is elosed, the Fed- eral Farm Loan Act, as it now reads (12 U.S.C. 751-7, 712), requires the :following proce- "re written report on the ,,ecurity is made ;in appraiser designated or appointed by the Federal land bank of the district. This appraiser may be the manager or another em- ployee 01 the association. 2_ A written report is made by the as- sockite loan committee 'Minh consists of three or more members of the association who are borrowers from the and bank. The 'manager of the association to also eligible for membership on the loan caramittee. The committee is elected by the board of directors of the association and, in addition to ap- proving loans on Ltehalf of the association, it Sr a.y also be authorized to elect applicants to membership in the associgtion. 3. Final aproval of a loan is by the Fed- eral land bank, hut no loah may be made Sinless the report of the appraiser and the 1.../t, 19( !; report of the association loao committee are' favorable. Under step (2), the association loan com- mittee report form often must be taken out to the members for approval and signature. This may involve two or three separate trips to the homes of the mend :tins in different parts of the association territory. 'She pres- ent amendment would permi's this step in tie present procedure to be modified. IL would_ do this by rendering report, and approval hy the manager or another employee of the fes- sociation acceptable, if elute authorized, in lieu of action by its loan committee. This is claimed to be warranted n many instances because of the training and experience of such personnel. Without mi limizing the - penance of approval action lay niihrhers of the association, it is recogisized that there are circumstances in -whicl: tin aisociation would want to and would he justified in giving this responsibility to a competent manager or other employee. To what extept an association chooses to if? so would be determined by its own hoard of directors. It would also be subject to a,utl: orization by ti- hoard of directors of the Fe,leral land bank of the district and by the Farm Credit, Ad- ministration. One of the limitations in- tended by the Farm Credit Administration is that the manager or (alai: employee as e- thorized to act in lieu of the association loan committee shall not act on a loan in which he is interested directly or indireethr. The Farm Credit Administration has indicated, too, that actions by the :manager or other employee under the new authority would be reviewed by the association loan committee or board of directors at their next: meeting.. The committee has been ar shred that this review will also cover applictitions on which. the recommendation by the manager or oth- er employee was not favorable_ Section 2(b) : This amendment concerns an applicant for a Federal and bank loan who owns and is farming :a.i1 a single opera- tion land in more than one tiarin credit die- trick Under existing law, Federal land bank loans "shall be secured by duly recorded find mortgages on farmland within the farm credit district in which the 1:in.d is situated" (12 U.S.C. 771 First). To the existing law section 2(b) would add "and which mort- gages may include farmland within other farm credit districts to the extent author- ized by the Farm Credit Administration." An identical addition Would be made with reference to first Mortgages which a Federil land bank is authorized to iaquire otherwise than by making new loans: to,, by invest- ment or purchase (12 U.S.0 . 781 Second The stated intention is to permit tn appli- cant with a farming operatio's in more than one district to be served by one land hank instead of borrowing from two or more such. banks. There is no intention to permit a Federal land bank to lenet on farmland out - side of its own district except in collection with farmland in its own dititrict, all being owned and operated by a sin ;le eligible ap- plicant. The committee 'understands, in addition, that Farm Credit Adminis-Gration regulations will require the concurrence of the Federal land bank for the district Li Which the land is situated before another Federal land bank may malt' a loan on it, Sectio:n 2(c) : The major statutory eligi- bility requirements for Feeltral land bank loans are (12 U.S.C. 771 51st.)): "No such loan shall be made to any per- son who is not at the time, oi shortly to be- come, engaged in farming operations or to any other person unless the principal part of his income is derived from Farming opera- tions. * * ? the term "person" includes an individual or a corporation engaged in farm- ing operations; * * * but no euch loan shall be made to a corporation unle:s the principal Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 April 14, 1966 Approved For ReleAse 200151296 CIUNKRB00446R000400060009-3 7775 CONGRESSIoN AL .ttt part of its income is derived from farming operations and unless owners of stock in the corporation assume personal liability for the loan to the extent required under rules and regulations prescribed by the Farm Credit Administration. * * 5" , Section 2(c) would strike out the italicized words. This would eliminate the assumption of personal liability by a stockholder as an eligibility requirement for a Federal land bank loan to a corporation. The stated in- tention is that such assumption of personal liability may instead be required for credit and policy reasons. Such supervisory guide- lines as are deemed necessary in this re- spect would be covered in rules and regula- tions issued by the Farm Credit Administra- tion. Most Federal land bank loans are made to individual farmers or ranchers, although loans to corporations have been authorized since 1935. For the last calendar year, the total of the loans to corporations has been 0.65 percent in number and 4.52 percent in amount of all the loans made by the 12 Fed- eral land banks. By the present amendment, there is no intention to increase or prefer corporate farming over family or individual farming. It is recognized, though, that there are families and individuals who have orga- nized a corporation for their farming. In most cases it is expected that as least some of them, as stockholders, will continue to be required to provide personal liability for a loan to their corporation for credit or pol- icy reasons. This would have to be done in any cases where the local Federal land bank association, which indorses and there- by incurs-liability for the loan, conditions its favorable recommendation on such per- sonal liability being required. However, in instances where such assumption of personal liability is not obtainable, and the loan otherwise meets all requirements, it is thought that the Federal land banks should no longer in every instance be precluded from making a loan for want of such per- sonal liability. While this amendment will enlarge the possible loan service for only a limited number of applicants, any increased lending under it will also benefit the banks and all of their borrowers. Section 2(d) : 'Under existing law, "The amount of loans to any one borrower may not exceed $100,000 unless approved by the Farm Credit Administration * * 5" (12 U.S.C. 771 Seventh). In this requirement section 2(d) would substitute "an amount specified by the Farm Credit Administration" for the "$100,000" limitation. This will leave it for the Farm Credit Administration to specify the size of the loans which a Federal land bank may close without the prior approval of the Farm Credit Adminis- tration. The committee sees no objection to giving the Farm Credit Administration such discretion in view of the successful lending experience of the land banks. In the last calendar year, 1,118 out of a total of 58,403 Federal land bank loans were in excess of $100,000. The average size of an out- standing Federal land bank loan is $11,100. The present amendment refers only to the size of a loan which may be closed by a Fed- eral land bank without the prior approval of the Farm Credit Administration. It has no reference to the maximum loan which may be made. That is now fixed by the Farm Credit Administration as not more than the higher of (1) 10 percent of the net worth of the bank making the loan, or (2) one- twelfth of 10 percent of the combined net worth of all Federal land banks. As recog- nized under the preceding amendment, sound loan volume benefits both the banks and their borrowers. The committee pres- ently sees no occasion to object to it, so No. 63-2 long as the lending is to applicants who are within the letter and spirit of the eligibility requirements quoted under the preceding amendment. FEDERAL INTERMEDIATE CREDIT BANKS Background: The 12 Federal intermediate credit banks, 1 in each farm credit district, are organized and operate under title II which was added to the Federal Farm Loan Act by the Agricultural Credits Act of 1923. Their function is to finance the 471 production credit associations and over 100 other financ- ing institutions that make short- and inter- mediate-term loans to farmers and ranchers. The total of such financing by the credit banks during 1965 was $5.3 billion. Over 90 percent of such business was with the pro- duction credit associations. The credit banks do this financing by dis- counting for the production credit associ- ations and the other financing institutions, with their endorsement, the notes taken by them from the farmers and ranchers, and also by making loans to the associations and other financing institutions secured by such col- lateral as may be approved by the Governor of the Farm Credit Administration. Loans may also be made to the associations without collateral to the extent authorized by the Farm Credit Administration. The loan funds of the credit banks are obtained chiefly through the sale of their consolidated deben- tures to the investing public so that the interest and discount rates which the banks charge depend upon the rates of interest which the banks have to pay on their deben- tures and differences in administrative cost. The presently approved rates for the differ- ent banks range from 51/4 to 53/4 percent. About 35 percent of the total capital stock of the Federal intermediate credit banks is owned by the production credit associations, and the other 65 percent continues to be owned by the Government. Under amend- ments enacted in 1956 and 1965, it is in- tended that the associations eventually will come to own all of the capital stock in such banks as their Government capital is gradu- ally retired. Section 3(a) : To the existing powers of the Federal intermediate credit banks would be added authority "to purchase for investment obligations of the Federal land banks and the banks for cooperatives and, to the extent authorized by the Farm Credit Administra- tion, obligations of any agencies of the United States." The latter obligations would in- clude consolidated notes of the Federal home loan banks and securities issued by the Federal National Mortgage Association. Similar investments are now permitted for the Federal land banks and the banks for cooperatives. Under existing law, the credit banks have been limited to investments in 'U.S. Govern- ment bonds for their funds which are not immediately needed for financing the pro- duction credit associations and other financ- ing institutions for lending to farmers and ranchers. Such additional investment au- thority would add flexibility through a wider choice of investment media of VariOLIS ma- turities. In most instances, too, it would provide the credit banks with a higher in- terest yield on such investments. While such additional investments would be mostly for a short term, they nonetheless would be available, if needed, as collateral for deben- tures issued by the Federal intermediate credit banks and as collateral for other bor- rowings. If used as collateral for deben- tures, the additional investments would be a relatively minor part of the debenture col- lateral which in the main consists of loans discounted for or made to the production credit associations and other financing in- stitutions. Section 3(b) : Existing law (12 U.S.C. 1092) specifically requires each Federal intermedi- ate credit bank to make three reports a year to the Farm Credit Administration as to the resources and liabilities of the banks, veri- fied by an ofilcer, and signed by at least three directors. Such reports must be published in a newspaper where the bank is located and are subject to proof of publication. Special reports may also be required by the Farm Credit Administration. In lieu of the existing requirements, section 3(b) would provide that "the Farm Credit Administra- tion may require reports in such form as it may specify from any or all of the Federal intermediate credit banks whenever in its judgment the same are necessary for a full and complete knowledge of its or their finan- cial condition or operations." The Farm Credit Administration presently keeps informed of the condition of the banks by requiring monthly reports and through examination of the banks. The amendment would make no change in this respect. What it would do is relieve the banks of locally publishing their separate sworn and attested statements at least three times a year. Inasmuch as the individual banks have not separately issued debentures since 1935, what may once have been deemed a reason for the present local publication re- quirement no longer exists. In any event, the separate statements of each bank are Widely distributed in its district to all who have an interest in the bank and to anyone on request. Since the banks may not accept deposits, there is no depositor group to be considered. Of more interest to the investing public are the consolidated finan- cial and earnings statements of the 12 banks, since the banks are jointly and severally liable for their consolidated debentures. These are available in a brochure that is distributed to debenture dealers, commercial banks, and other interested parties. They also are widely circulated by investment serv- ices and periodicals. Among other places, both the individual and the consolidated statements are included in the annual report of the Farm Credit Administration to Con- gress and in the audit reports of the Comp- troller General. BANKS FOR COOPERATIVES Background: The 13 banks for cooperatives, 1 in each farm credit district and the Central Bank for Cooperatives in the District of Co- lumbia, were organized under the Farm Credit Act of 1933. They make loans to farm- ers' marketing, purchasing, and service co- operatives. Three distinct types of loans are made: facility, commodity, and operating capital loans. Since the loan funds of the banks, other than those available from their capital and surplus, are obtained from the sale of consolidated debentures to the inves- ing public, interest rates charged by the banks for cooperatives depend, to a large extent, upon the rates they have to pay on their debentures. Interest rates vary with the type and term of loan and between banks. At the present time, interest rates charged by the banks for cooperatives range from a low 01 43% percent to a high of 53/4 percent. The legal maximum is 6 percent.. The banks for cooperatives were capitalized by the United States out of the revolving fund from which the Federal Farm Board, previously made loans to cooperatives un- der the Agricultural Marketing Act of 1929. Since the Farm Credit Act of 1955, the Gov- ernment capital in the banks for cooperatives is being systematically retired by the crea- tion of permanent capital provided by the users of the banks. The maximum Govern- ment capital ever in the banks has been re- duced by about 71 percent. Two of the banks ?for cooperatives (Berkeley and Houston) retired all of their Government Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 d :ONGRESSIONAL RE( ORD ? SENATE elm rid in 1963, and the other batiks are ex- pecied to do so by 1970. ;faction 4: As now in effect (12 'U.S.C. :14.1.134j), the Farm Credit Act of 1933 )rovides that "subject to such terms and eonditions as may be prescribed by the lemon, Credit Administration," the 12 dis- seict banks for cooperatives and the Central .:rank tor Cooperatives are authorized "(a.) it) make loans to cooperative associations as di:lined in the Agricultural Marketing Act, as amended, for any of the purposes and sub- ject, to the conditions and limitations set irrin in such Act, as amended." :section 4 of the bill, as introduced, would delete the words "for any of the purposes and Nutrient to the conditions and limitations eat in Ii in such Act, as amended." Wish the committee amendment, section old also transfer to the Farm Credit Act of 1933 the sentence, now contained in the Agricultural Marketing Act (12 U.S.C. 1141f ). which specifies that the interest rate ii loans by any bank for cooperatives may not ierceed 6 percent. Tler amended authority of the banks for cooperatives in the 1933 act then would be inberrit to such tortes and conditions as may be prescribed by the Farm Credit Ad- mine tration fa) to make loans to cooperative associations as defined in the Agricultural Marketing Act, as amended." The only provision of the Agricultural Marketing Act hereafter applicable would be section 1.5(a), which defines the farmer co- oper:it:Ivo associations that are eligible to borrow 11.2 U.S.C. 11411(a)1. All other loan orovisinna of the Agricultural Marketing Act won id Ti) longer be applicable. 'el.: more significant provisions that would rendered inapplicable are those contained seetion 7 of the Agricultural Marketing is amended (12 U.S.C. 1141e). Most of 'Ii orivisions originated in 1929 when loans were made from the revolving fund es-Leh- i:erred aider the act which then also provided IC v.11 re programs which have since been ffiecootanued. As currently in effect, the iirovisions that would be rendered inap- plicable may be sunantorized as follows: rieder section 7, physical facility loans ;nay oil, exceed 60 percent of the appraised oi the security therefor (7(c) (1) ) and mien be repaid upon an amortization plan iiver a period not in excess of 20 years ? i(d) Further, no loan for the purchase er lista: tic facilities may be made unless the ,overnor of the Farm Credit Administration tools that the purcha.se price or rent to be reireonable (7(c) (2) ) ? 1. The separate references to loans to con- it cr acquire or refinance physical fa- il(a) (2) ), loans to assist in the ef- inciter, merchandising of agricultural coin- retail ries and food products thereof, and loans fa ismueraLive association for financing its mienitions (7(a) (1) ), in effect constitute a cesei iiisition of loans. These have come to ? nirred to as ifecnity, commodity, and tmerii one capital loans. Starting in 1933 the ;eon, Loco interest rate provision for com- modity ??ini operating capital loans was dif- forint titan for facility loans. However, in. i.ovo distinction was removed, and since ilien ell loans have been subject to the same interest provision which will con- ? eoplic.able as noted earlier_ If the para,te statutory provisions for items are now to become inapplicable. contadered to follow that there no longer wirinis be occasion for the present separate clotistei of loans. 3. at, present section 7(b) also provides Ltiat the loan shall be in furtherance of pidiuy declared in section t of the Agri- milturin Marketing Act of 1929 (12 U.S.C. 1141) . many of the purposes of which have v. ace expired and no longer are relevant. it; Ms., requires that the cooperative as- sociation applying for the loan has an or- gailization and management, and business policies, of such character as to insure the reasonable safety of the loan and the fur- theranee of such policy. Inasmuch as the hanks for cooperatives Jot ve now had over 33 yea is of lending ex- perience during which thoe almost 48,000 loans for a total of about $15 billion have been made, it is thought lhat the statutory provisions that have just been reviewed no longer serve a useful purpose. Without them, but still subject to such terms and conditions as may be prescribed by the Farm Cr?idit Administration, it is thought that the banks for cooperative, will have more flexibility and be in a bettec position to meet the needs of the former cooiteratives that are el iisi ble for loans. At the hearings, the Farm; Credit Adminis- tretion outlined tire terms id' the regulations it was considering for this lending. A,ssur- an??,e was given that the loans to farmer co- operatives will both meeet their needs and conform to adequate credit standards. FARM ORES ml' BOARD P:LECT/ONS Section 5: The Farm CI edit Administra- tion conducts polls of the three voting groups in each farm credit district (i.e., Federal land bank associations, production credit associations, and cooperative associations eligible to vote as stockholders of the bank for cooperatives) to elect members to the district farm credit boards and to designate persons for consideration iry the President for appointment to the Fein:rat Farm Credit Board. Under existing law 112 U.S.C. 640e, 64(1), a ballot ni?ty not be counted unless it is received by the Farm Credit Admi,nis- trillion within 30 days aft???r it was mailed out.. Section 5 would incoiase the 30-day Period to 60, excel.i:t that for elections to hll vacancies the Farm Credit Administration may specify a shorter peri ?ff. than 60 days but not less than 30 days.. This would be effective starting with the next calendar year. The longer period will give the Federal land. bank associations and iiroduction credit assisciations more flexibililer in scheduling the ineietings of boarres of directors at which their vote in those polls is decided upon., FEDERAL :FARM CREW r BOARD eeiceden 6: Th.e Federal Credit Board con- sists of 13 members, 1 appointed by the Pre :intent with the advice mid consent of the Senate from each 3f the 12 barns credit dis- tricts, and a 13th member who is a repre- sentative of the Secretary of Agriculture. This is it part-time Board am itch has respon- sibility for the ger oral dire tion and super- vision. of the Farm Credit Administration that otherwise consiSILS of ti ei Governor and other employed i)ersonnel The present amendment would increase from "$50" to "$1.e1)" the sum that each member of the Federal Farm Credit, Board Mall receive for each. day spent in the per! ormance of his official ditties. As provided in the Farm Credit; Act of 19511 such compensation may not he paid for more than 71 days in a calen- dar year (12 U.S.C. 636c(f) ) The increased COIF pernatiOn LVOV ni be inure in line with that paid other personnel since the Govern- ment Employees Salary Reform Act of 1964 and the Federal Employee:. Salary Act of 1965. As is the case with a': administrative expenses of the From Credit Administration, the compensation of the toembers of the Federal Farm Cerslit Boar,' Is paid from assessments against the bay ics and associa- tions supervised by the Perm Credit Administration, WORK OF PREPAREDNESS INVESTI- GATING S ERMA/MIT EWE Mr. BYRD of West Virginia. Mr. President, although I am a relatively April 14, 1961 new members of the Preparedness Inves- tigating- Subcommittee, nevertheless, it was highly gratifying to have read an editorial of the New York Times on Monday of this week in which recogni- tion was given for the outstanding serv- ice so admirably rendered to the country by its distinguished chairman. Senator STEN-Nrs, and the subcommittee staff, in probing and uncovering serious defici- encies of personnel and equipment in the Army. Under Senator STEN-Nis' judicious and able leadership, the Preparedness Sub- committee sounded warnings wall over a year ago that the war in Vietnam could result in an unacceptable drain upon the personnel and equipment resources of our active military forces unless cor- rective and remedial measures were taken immediately. Because those warnings were not heeded at the time they were made, we must now witness the removal of troops ft-cm Europe, the deterioration in the combat readiness of our other forces, and even complaints from our valiant men in Vietnam of shortages of repair parts, clothing, boots, and certain types of ammunition. I consider it a distinct privilege to be associated with the chairman, the dis- tinguished members and able staff of the Preparedness Investigating' Subcommit- tee. The year-long investigation which prompted the New York Times' editorial required the staff to embark on long journeys within three continents and those with whom they dealt confirmed their professional competency by report- ing that they were found to be "thor- oughly objective, completirly professional, and unusually knowledgeable." No finer tribute could be paid to those who have worked so hard. I have personally been deeply impressed by their dedication and competence and want to take this oppor- tunity to commend them publicly. Mr. President, I ask uLanimous con- sent to have the New Yoik Times edi- torial printed in the R,Ecoro. There being no objection, the article was ordered to be printed .:n the RECORs. as follows: [From the New York (N.Y.) Thins. Apr. 11,19'65[ OVERSTRAINED As M Y Senator STENNIS and his Preparecineria Subcommittee have done the Nation and tins Armed Forces a service in pinpointing the Army's serious deficiencies ol persoonel ami materiel. The temporary wit,hdrawiii of 15,- 000 Army specialists from Wist Ge 'manyto meet military needs in Tic' earn comfit:1m the strain. For at least a year the Seim tor and his as- sociates have been warning that the Viet- namese war has resulted in ri major and, in some items, dangerous "drawlown" of avail- able military supplies: tha t war tiss also reduced the experience level of yin only all Army units except thane actually in Viet- nam. The steps taken by the Pentagon to meet the drain have been inadequate to maintain a strong and read; strategic re- serve, with the result that the Army is spread thin. Very few trained until a are ready to reinforce Vietnam or to meet other emer- gencies. Nearly all the Regular: Arny unite in the United States are, in effect, :raining units; certain types of key specialists in Europe have been Lapped for service Vietram; two Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 April 14, 1966 CONGRESSIONAL RECORD ? SENATE 7797 majority of cases, the question should be left to the elected representatives. Actually, this is one of the principles of the Republican Party. It is certainly a principle of a republic that its elected officers should decide and determine the rules of the game and determine what the laws should be. It should not be the overall vote of everyone involved. We are elected to inform ourselves, to vote our convictions, and to vote on the basis of our opportunity to assume responsibility. But I would agree with the Senator from Iowa that there are rare occasions- when it is perfectly appropriate to call for a public referendum; certainly the opportunity to deprive the people of their equal right to vote should not be such an instance. Mr. MILLER. Mr. President, I do not believe that the question of whether one is in favor of a referendum procedure is a partisan matter. I cannot think of anything in either the principles of the Republican or Dem- ocratic Parties which would cause any difference of opinion on a partisan line basis. Some Republican States have an initiative and referendum and others do not. Some Democratic States have the initiative and referendum and others do not. That would seem to bear out the truth of the statement. I suggest that the Senator may be lay- ing a trap for himself if he talks of all the money and pressures involved in a referendum and then concedes that on certain rare occasions he might go along with a referendum. Pitfalls are con- tained in any referendum. I think that one ought to be for or against a refer- endum procedure. I do not think that the people ought to be subjected to studying a long ballot with many different items on it in a referendum. It may be desirable that the vote of a certain percentage of voters in a State, perhaps 25 percent of those who voted in the last gubernatorial election, be re- quired to have the initiative on a refer- endum. I cannot see that we are faced with that proposition here. It would only come before the voters once every 10 years. It would be required to be on the ballot. This reapportionment matter is of such major importance that the Senator from Wisconsin would not have to worry about the large turnout of people to vote on this proposition once every 10 years. I think that the essential arguments, after we cut through all of the side issues that are being tossed around to some extent on both sides of this question, concern the question of whether we be- lieve in the initiative in the referendum of the people. I happen to believe this. I think it is probably the best way of ? getting an expression of the will of the people of a State is to have the question put before the people in a referendum. That is all that the Dirksen amend- ment would do. It would do that very thing and put the issue before the peo- ple in a general referendum and give them a choice, and that choice must include whether the second house should be on a strict population basis. If they do not want their votes to be diluted, they will have that choice. Mr. PROXMIRE. Mr. President, I thank the Senator from Iowa. I appre- ciate his viewpoint. It seems to me that the issue is crystal clear. The issue concerns whether each American, re- gardless of where he lives or his back- ground, as long as he is a qualified voter, should have an equal vote. The referendum is strictly a sweetener. It is tossed in because there just are not any valid reasons for depriving people of their right to an equal vote. So what have the Dirksen amendment proponents done? They have cleverly fallen back on the referendum device. The argument runs: the proposition may be unfair, unwise, retrogressive, and dangerous, but so what? Why not let the people decide? The answer, Mr. President, is that the people are very likely to be required to vote in a rigged election, an unrepre- sentative election, because the body that puts the question has a transparently vested interest in securing the an SOUTH VIETNAMESE DEMONSTRA- TIONS Mr. PROXMIRE. Mr. President, the demonstrations in South Vietnam are unfortunate and untimely. However, I think they are a basic part of the strug- gle for self-determination. While there can be no doubt that the allied military efforts have slowed down as a result of the political unrest, the demonstrations indicate many people of South Vietnam strongly believe demo- cratic government is no longer a remote aspiration but a real possibility. It is highly significant that these civil disturbances have occurred at a time when the military offensive has been going well. The New York Times of Friday, April 8, 1966, commented: All the squabbling factions think the war is going well enough so that they can assume there will be a country to govern. Some are trying to arrange the elections as though Saigon were Boston. After the tremendous sacrifices the American people have made to assist the Vietnamese people in their long and valiant fight for freedom, the civil strife in Vietnam is especially difficult for us to accept. First, there is a small, isolated but dramatic ingredient of overt anti- Amerianism in the disturbances. Sec- ond, the military efforts against the Vietcong and the North Vietnamese in- vaders are definitely impeded. Third, the end result could possibly be a gov- ernment which would tell the U.S. forces to go home. Let us not forget that, although we may vigorously disagree with the timing, that the protesters are asking for an elec- tion and a constitution. What is wrong with that? No faction in South Vietnam seeks a caretaker administration or an under- taker administration to preside over the requiem for democracy in Vietnam. These people are predominantly anti- Communist. They want to compete for control, because at long last through the heroic efforts of their Own people and the great sacrifice of the United States, there is a government worth governing. If South Vietnam is to have a real chance for a free and independent fu- ture, it must make great progress in land reform and education. Helping to achieve this reform is a great challenge to us, but it is not the greatest challenge we face. And America's most challenging prob- lem in Vietnam is not military victory. We surely have the power to achieve that objective. Our toughest challenge is how to assist South Vietnam to achieve the educa- tional and economic progress necessary to make that victory meaningful with- out the fact or even the appearance of American domination. American help has to be without strings. We must know it. And, most important, the South Vietnamese must know it. The South Vietnamese want their own Vietnamese revolution?not an American revolution. Whether this country has the wisdom and especially the patience to help make this possible is our big test. MILWAUKEE COURT DECISION ON NATIONAL LEAGUE BASEBALL Mr. PROXMIRE. Mr. President, yes- terday a circuit court in Milwaukee handed down a historic decision on ma- jor league baseball. I feel very strong- ly that it is a sound decision. Organized baseball has previously en- joyed special privilege under the anti- trust laws. Now it is on notice?the Na- tional League and the Braves specifical- ly?that this privilege carries with it responsibility to the people who have paid its way. The Roller decision makes it more vi- tal than ever that Congress require ma- jor league baseball to divide television revenues as professional football and basketball now do. Without this change there will continue to be immense diffi- culty in getting and keeping a major league team in Wisconsin. For 12 years Milwaukee fans supported the Braves in greater numbers than any city in organized baseball. The obvious economic reason for the move to Atlanta is not to secure greater fan support, but to pick up a fat television contract that Milwaukee because of geographical lim- itations can never match. This is wrong and unfair. The question has now become whether major league baseball is our national pastime?and truly a sport?or whether it is a commercial television package? like "Peyton Place" or "Get Smart"?to be sold to the highest bidder. This ques- tion must and will be answered. NATIONAL MILK PRODUCERS FEDERATION TESTIFIES IN FAVOR OF SCHOOL MILK PROGRAM Mr. PROXMIRE. Mr. President, as I indicated yesterday, one of the high- lights of the recent hearings on the De- partment of Agriculture's appropriations Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 7798 Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3 CONGRESSIONAL RECORD -- SENATE April 1 , 1 O(>6 request or fiscal 1967 was the ap- pearance on the last day of the hearings o a number of public witnesses who testi- fied on behalf of their organizations in leroport ot: the special milk program for sehoolchildren. These witnesses unani- mously opposed the proposed Child T),Ul,rition Act of 1966. which I am begin- ring to believe is the most unpopular name or legislation peonosed by the Johnson administration. Today t would like to mention the eitement made by Pat Healy of the Na- :nal Milk Producers Federation in sup- nort of the school milk program. First tre federation points out, as I have so many times on this floor, that in order to limit the program to the needy, as the administration proposes, it will be neces- eary to "me a means test which can "only result iii discrimination against all schoolchildren." As the federation in- dicates, a number of needy children par- ticipate under the present program. .13y redirecting the program to the needy alone, the Child Nutrition Act could iasult in reduced participation by needy children since funds will have to be used Is provide milk on a completely free basis .mther than at a reduced price. Of course this means it will take more money to provide less milk. Perhaps the most significant point made by the federation?especially in view of its expertise in this area?is the l.qmact that an 80 :percent cut in the 1,rogram could have on dairy farmer in- come as well as Commodity Credit Cor- poration stocks. Statistics will show that tinder the school milk program in fiscal 1965. nearly 3 billion half-pints of fluild railk were consumed by children in over ,)1,000 schools, child-care centers, sum- mer camps, nursuries, and other child- care institutions. This represents 1.6 hillion pounds of milk?about 3 percent ef total nonfarm consumption of fluid milk in the United States. The federa- tion points out that "without the special milk program for children this quantity oi milk will probably be purchased by the Commodity Credit Corporation in the torm of manufactured dairy products at substmitial cost to the government for tPc product and its storage." This :Imply means, Mr. President, that a sub- rtantial cut in the school milk program will save the taxpayer little or nothing. ,keichtional funds will have to be spent to purchase the milk under the price sup- port program. BRACER? PROGRAM Mr. HOLLAND. Mr. President, I shall defer until later what I intended to say with reference to the pending business before the Senate. Mr. President, I am becoming increas- ingly concerned, as I am sure many of my colleagues are, over misguided actions of the administration which I feel will surely depress the agricultural industry Lu the degree that many of its producers will find it no longer profitable to op- erate. At this point Mr. SPARKMAN took the chair as Presiding Officer.) Mr. HOLLAND. Mr. President, on many occasions I have joined with some of our colleagues on the floor of the Sen- ate to denounce the actions of the De- partment of Labor with revrd to the furnishing of timely off-shore labor to assist in the harvesting of perishable fruits and vegetables. While alpine relief has been obtained, crop loose running in the millions of dollars have lmen caused by the i[act: of understanding of the prob- lems involved, and many acre:i are going Implanted this year due to the uncer- tainty of obtaining :necessary labor. At the same time many farmers and pro- cessors are moving their op 'rations to Mexico, and some to the I ahamas or elsewhere. Now, the proposal to ameed the Fair Labor Standards Act of 1938 as reported out of the Education and Laloir Commit- tee in the other body with the support of the administration w 11, if ens ated., estab- lish rt.-MIMI:um wages for agrieulture em- ployees, never intended when the act was first considered; it alio incluMis unfavor- able action toward those eng 'tged in the processing of agricultural commodities. This, Mr. President, is anothe I. indication of unfriendly actions aimed at the farm- ers, growers, and processors. , Now. Mr. President:, comes nother ac- tion of the Department of Agriculture and the IDefense Department o limit the purchase of pork by the mietary in an action designed to further depress farm prices. Mr. President, whet will beeome of the farmer, the grower, and the processor as a resist of these actions which will not allow him to receive an adermate return to keep him in businass? It is my intention to do al: possible to protect our agricultural inte:rests and I am sure many of my colleagoes feel as I do. We, the greatest agricultural pro- ducing nation in the world, sailed upon to feed millions of undernouriahed people of the friendly countries of I he world? and, recently called upon by the Presi- dent to increase agriculture assistance to those countries?must preset :,/e) the most basic and important industry of our country. Mr. President, I ;ask unananous con- sent to have printed in the RECORD an articlo published in the Washington Post this morning, entieled "Farmers Seen :Squeezed by Policies,- which re- ports on a statement made by the Presi- dent of the American Farm 1.1-ureau, Mr. Charles B. Shuman., and which tells a part ot the story of what is Lappening to our farmers today. There being no objection, the article was ordered to be printed in the RECORD, as follows: FARIVIEES SEEN SQUEEEED BY L 3.J. POLICIES President Charles B. Shuman ,')f the Amer- ican Inrm Bureau Federation siild last night the Juinison administration is making the farmer a whipping boy for I llation gen- erated by the Cover meat's c,vn spending The fano official said the priducer is get- ting, "the double whammy- from the admin- istration in the form of legislative recom- mendations to force farmers to pay higher wages and in adnainisrative aet::ons designed to pull down farm prices. In a speech prepared for a Cornell uni- versity forum, Shuman said: "President Johnson knows as .veil as nearly every taxpayer that his irresponsible spend- ing, which exceeds anything in the hiiitary of this country, is the real force driving up prices and deflating the value of tile dollar. "And now that the administraV on publicly admits that inflation is here, it is seeking he scapegoat to divert public attenti.;o, from the real culprit." Shuman said farmers are pay; ?ga hi;Lpair price for inflation than any otets7 group. He said their production costs increased from 620.2 billion in 1960 to $50.3 bill 'I in 1961. Shuman said that adrnili!Str; ionsadions designed to depress farm prices include cur- tailment of military purchases el pork; CDV- ernment "diunping" of surplus gs iins to force down market price; increased imports of cheese to hold down priceig i ti, 11 et Light quotas on exports of hides, mainly cat- tle hides, and forecasts of Secret iry of Agri- culture Orville L. Freeman tkpit r ,Lirp prices will drop 6 to 10 percent this ye Lr. (At this point Mr. PROXMT61 took the chair as Presiding Officer.) REAPPRAISAL OF OUR FIlLE,CTIVE SERVICE LAWS Mr. KENNEDY of Massachusetts. Mr. President, there has been increasing in- terest, in recent months, in Or WOrkint1S of the selective service law. This is nat- ural and proper, as draft calls increase, and more and more young men must plan their futures around the probability of military service. The present draft law has been in ef- fect, without significant change, since 1940. Next year the law eigiires and must be renewed by Congress. The last three extensions of the draft, each for a 4-year period, passed Congress rou- tinely, without any searching review. This should not happen this time. Next year's expiration date, combined with the great increase in public interest in the draft, make the coming months an excellent time for a thoroughgoing re- view of draft policy and procedures. If Oils is done now, when the time for re- newal comes, we will be in a position to legislate responsibly and constructively on this important subject. In this con- nection, I note that the di; tinguished chairman of the House Armed Forces Committee has said his committee plans to hold hearings on the draft this year. I have undertaken a preliminary study on my own in the last few necks. The Selective Service System is cooperating in my requests for certain statistics. I intend, in the near future, to make some suggestions about improvements in the draft law. But today I would like to report to the Senate on one al poet of the present law which, in my opinion, has created very inequitable situations. Under the present statute, the total monthly requirement for dra.'Lees is de- termined by the Department of Defense, transmitted to Selective Service and then allocated to the States. Each State is given a quota which it must meet; and in turn, each State levies a quota on each local board. The quota is deter- mined in accordance with section 5(13) of the selective service law, winch states: Quotas of men to be Inducted for * * * service * * shall be determined for each State * * * on the basis of the iietual num- ber of men in the several States * * * and the subdivisions thereof, who are liable for such * * * service but who are it deferred after classification * * Approved For Release 2005/06/29 : CIA-RDP67600446R000400060009-3