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August 13, 1974
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kugust 13, 1 proved For Release 2001/09/07 : CIA-RDP75B00380R000500410007-9 CONGRESSIONAL RECORD ? SENATE about 15 percent versus an average of about 19 percent, in the ether industrialized pa- tions?and we, have also had a much slower rate of productivity advance. The need ,for emphasizing capital formation should be clear. In addition, however, there are important new investment requirements that go be- yond the normal needs to replace and ex- pand the existing stock of productive capi- tal. There are many of these new investment requirements, including pollution control, new systems of urban transportation, and energy. The latter is the most important by far. Project Independence is estimated to take from three-quarters to one trillion dol- lars of new investment over the next decade or so. In recent years energy has accounted for about one-fifth of total investment; in the foreseeable future, however, that propor- tion will have to rise to about one-third. It is clear, therefore, that our future needs for saving and investment represent an enor- mous challenge above and beyond what Is normal for the American economy. Indeed, Investment will have to take a rising share of economic output at the expense of con- sumption and government spending. To do this, we will have to make several Important changes in our policies. First,, Government spending will have to be curbed to make economic room for the added in," vestment, Second, profits will have to grow to provide both the incentive and the where- withal for inveStment. We cannot look upon profits as an unnecessary evil, as I fe t so many Americans now do. We must void legislation and regulation that is puni ve of profits honestly earned. If we do not, apitai formation will be inhibited and the al pur- chasing power of workers' earnings ill grow I/10113 slowly. 'Third, we must reverse our lo held pol- icies that penalize saving and encourage consumption. Our tax system s uld be re- examined to this end, Federal It erve Regu- lation Q, which limits interest aid on sav- ings accounts, should be re ised at the earliest opportunity. And we ? ould permit the normal incentives of th price system to operate freely. We must ? ,t impose ern- ficial government constraint as for example we have done for so man years, and are still doing, in regulating th price of natural gas. It is instructive to, reca what took place after August 1971, whe we removed the artificial constraint ed exchange rates that had produced an ? ervalued dollar for So many years. In the ft e market, the dollar moved to new, more c repetitive levels and our trade balance,, whi had been in a nose dive for many years returned to surplus. Similarly, when we changed agricultural policy 180 degrees t permit maximum pro- duction, American rmers responded to the incentives of the ket place by planting large amounts of dditional acreage, which are now produ ng record harvests, the prospect ,of whic has brought grain prices down. These ar just two examples of what the market p e, given reasonable freedom and time, can chieve in overcoming serious economic pro ? ems. OLD-5E RELIGION Another f ndamental part of the fight against Mil tion is what has come to be called "tha old-time religion," the essence of which i sufficient monetary and fiscal re- straint to keep the demands for economic output wi in our capacity to meet them. In- deed, if are to squeeze out the high rate of inflation that is now thoroughly embedded in our s stem, we will have to operate with a margin f slack in the economy. - 'Fins ? oes not mean that economic policy shatild ?e harsh and brutal. Not at all. A re- cestiO would not help the cause of price stabil y?quite the contrary, because a re- cessi.,. would force us back into strongly stimulative policies that in the end would create still more inflation. ,Frequent and abrupt changes in economipf policy are al- most as disastrous as no reitraint at all, Still, that old-time religion has its costs. We will have to tate some unpleasant-tast- ing medicine, and we will have to continue to take it for several years or longer. We will have to give up some government spending programs, ant unless growth in Federal spending can /se cut back appreciably we will have to for the pleasures of a tax cut. Credit will ave to be less easily available. Business p ofits cannot grow quite so buoy- antly. 17 mployment will have to average slightly igher than it otherwise would. These /are not negligible costs. But if we are to gain control over inflation, there is no at er way. The costs of continued rapid inflation, which is the only alternative, are far eater. A d that brings us back to politics again. I said at the outset of this talk that my big- gest worry was whether the American people and their Government would have the sus- tained political will for this fight. I think there is more hope now than ever before. ,the double-digit inflation of this past year has frightened many people, and made them more willing to support tough anti-inflation policies. Good economics is getting to be good politics. But my question has not been answered yet. We do not know if the people and their elected representatives want to attack the root causes of inflation, rather than just the results of inflation. We do not know if they will face up to the costs of anti-inflation policies. We do not know if they will assess these costs?as I do?as being much smaller than the costs of continued rapid inflation. If we can persuade them of this, then we will have gone a long way toward achieving the important goal of electing an inflation-proof Congress in 1974. LAW OF THE SEA CONFERENCE Mr. MUSKIE. Mr. President, between August 4-7, I attended the third United Nations Law of the Sea Conference, being held in Caracas, Venezuela. As an ad- visor to the U.S. delegation, along with the Senator from Rhode Island (Mr. PELL) and the Senator from Alaska (Mr. STEVENS), I had the opportunity to dis- cuss oceans issues with our negotiating team, including Ambassador Stevenson; Ambassador Shirley Amerasinghe of Sri Lanka, president of the conference; sev- eral leaders of foreign delegations; and representatives of the U.S. fishing indus- try. I was greatly impressed by the far- reaching significance of the 100-item conference agenda and the seriousness and diligence with which most delega- tions are carrying out their responsibili- ties. I want to take this opportunity to share with my colleagues some observa- tions about the proceedings of the 'con- ference. The 149 nations represented in Cara- cas are involved In a most complex but crucial undertaking: they are trying to draft a comprehensive treaty governing the use and conservation of the world's ocean resources. It would be a mistake to understimate the difficulties fazing the negotiators at the conference, the largest international gathering ever convened. Each of the states represented?coastal, landlocked, developed, developing, mari- time, nonmaritime--has its own inter- ests, its own set of priorities, and its own short- and long-term policy goals. And toaf S 14761 these countries are not merely talking about existing law and how to perfect it. Rather, they have set for themselves the objective of discarding settled law and developing a comprehensive new regime for the oceans. The formal work of the conference is being done in three working groups. Of these, I was especially interested in the progress of committee II, the group con- cerned with the protection of coastal fish stocks and other issues related to coastal State jurisdiction. I came away from the conference con- vinced that the United States must adopt a unilateral 200-mile fisheries limit with- out delay. In a speech last month before a ple- nary session of the conference, Ambas- sador Stevenson announced a major change in America's position concerning the territorial sea and the establishment of a 200-mile economic zone. Stevenson said: We are prepared to accept, and indeed we would welcome general agreement on a 12- mile outer limit for the territorial sea and a 200-mile outer limit for the economic zone provided it is part of an acceptable compre- henseive package, including a satisfactory regime within and beyond the economic zone and provision for unimpeded transit of states used for international navigation. This decision on the part of the United States to support the establishment of a 200-mile economic zone is long overdue and vital to the protection of this coun- try's offshore fishing and mineral re- sources. For too long the United States has passively stood by while foreign ves- sels have virtually depleted our coastal fisheries stocks. Our experience in the Northwest Atlantic is illustrative of the gravity and immediacy of the situation. From 1952 through 1960, the U.S. fish catch from New England waters aver- aged about 700 million pounds a year, or 99 percent of the total catch from that area. In the early 1960's, the Russians. the Poles, the Germans and other for- eign fleets moved into these waters in large numbers. By 1969, the Soviet fleet was taking 836 million pounds, or 50 percent of the total catch from New Eng- land waters; while the U.S. catch had declined to about 418 million pounds, or about 25 percent of the area's total har- vest. In the last couple of years, the total U.S. catch has declined even from this level, for neither bilateral agreements nor regional organizations like ICNAF have been effective in protecting legitimate U.S. fishing interests. Unfortunately, the majority of the na- tions represented in Caracas do not seem to share a sense of urgency about the need to establish without delay a 200- mile economic zone to manage and con- serve the world's fisheries resources. Time and time again in discussions with for- eign diplomats concerning the work of committee II, I heard it said that "we need time to build new international law." Surely, time is needed for ideas to mature concerning certain issues?such as what transit rights vessels will have In other countries' territorial sea, in the proposed economic zone and in straits; what rules will apply to islands and arch- ipelagos; what rights of access and con- servation rules will apply to distant water Approved For Release 2001/09/07 :'CIA-RDP751300380R000500410007-9 Approved ForeRelease palc9.91inifftiMBP75sEgil,R8ff, 000500410W-19 tsf 13, 1974,, S 14762 ONGR E,mu fishing within coastal State con :relied manic jurisdiction. And the prospects ap- surface. There is considerable cautions econcimic zone' And I remain convinced pear good fOr compromise concerning the optimism that they can succeed. I fully that an enforceable international agree- extent of control that the proposed Sea- support their efforts. In fact, the sooner silent on the use of the seas is the best hA, A,itht,ritv will be able to exercise the better. Way in the long-run to stop the over- fishing which threatens to ruin our fish- eries resources. But if we are to preserve many of our effshore fish stocks--haddock, herring, eleekerel, yellowtail flounder, hake, half- do not think we can afford to wait tirtil the Law of the Sea Conference pro- 'tames a treaty. In my talks in Caracas, I found many foreigii delegates: optimis- tic that there will be agreement on the coastal zone jurisdiction issue by next year and that the General .Asserrilly goal of a treaty by 19'75 will be met. I am not so sure. After 5 years of preparatory work, the conference is still bogged down in preliminary matters, About 60 of the 149 nations are still trying to develop their own national positions on a variety of oceans issues, while many of the others hold widely divergent points of view. And in regard to conserving our fisheries re- sources, if we wait 2 or 3 years for an international treaty to be coneluded, there may not be any resources left to protect. Adopting an interim 200-mile limit, on the other hand, will provide immediate protection for all our offshore fish stocks and will signal the nations of the world that the United States is not prepared to stand by idly while the conference negotiations drag on. So I have returned from Caracas more resolved than ever to push for immediate legislative action on S. 1988. the bill which has been approved by the Com- merce Committee by a 14 to 2 vote and which would establish on an interim basis a 200-mile fisheries limit. This leg- islation is very close to the U.S. ,position enunciated by , Ambassador Stevenson last month in Caracas. Both provide for: First, management of coastal species by the coastal State; second, management of ana,dromous species such as salmon by the nation in whose rivers they spawn: and third, management of migratory species such as tuna by international commissions. But, Mr. President, S. 1988 recognizes the urgency of the situation and mandates interim unilateral action to regulate and conserve the marine re- sources in our 200-mile offshore waters. While there has been little perceptible forward movement concerning. coastal State jurisdiction issues, I was most en- couraged by the progress of committee , paesing the coast if the port State per- theI working group responsible for the sistently fails to enforce. seabed beyond national jurisdiction, that While in Caracas, I discussed the three is, negotiating the regime under which Proposals with various foreign delegates. deep sea mining will take place. Here, the I also voiced my view to the U.S. dele- discussion is focusing on the question oe gation that no Law of the Sea Treaty who may exploit the high seas area should prevent this country from apply- Some natioas, led by the United States, Use its present domestic laws and from d enforcing standards over the commercial development of the Mr. President, Ins& unanimous con- international seabed. sent to have printed in the RECORD the Committee III. the other 'working following articles concerning the Third prone of the conference. is responsible U.N. Law of the Sea Conference. for pollution and scientific research. There being no objection, the articles While four sources of pollution are being were ordered to be printed in the leacolue discussed?vessel source, land-based as follows: source, economic _zone pollution, and he- :Prom the New York Time, Aug. 3, 39741 ternational seabed pollution--it is ap- PROGRESS SLOW AT SEA LAW PARLEY; MAN r parent that vessel source pollution is by SPEAK PRIVATELY OF SrAtEMATE far the most controversial environmental (By Leslie H. Gelb) issue. Under the present system, the CARACAS, VENEZUELA, Aug. 2.?The Parque United Nations Intergovernmental Mari- Central, a complex of futuristic-looking sky- time Consultative Organization (IMCO) scrapers designed for totally self-contained promotes the drafting of conventions living, has been inhabited since late June by about 4,000 people whose almost total daily with standards, and flag states enforce standards. States have a right to coencnertnneis the sea thatlies seven miles be- thosey n They are mountainsnelega teathattrnitng Caracas. adopt higher standards, and to enforce United Nations standards in areas under their "jurisdic- law of the seas conference, officials of inter- tion." although it is not exactly clear national organizations and representatives what the term "jurisdiction" compre- of various economic interests and of a nuni- 1aends. At present, it is thought to include ber of liberation movements. the port area and the territorial sea. The The purpose of the conference is to come up by Aug. 29 with some kid of coherent. if basic problem is that the 1973 IMCO tentative, agreement on navigation fishing Convention on Pollution from Ships con- and sea mining, a partial pact that Will haVe. tains very weak standards and flag states the effect of restraining netions from mak- simply do not enforce them. Under U.S, lag individual laws on the sea. Then, next legislation?the Ports and Waterways spring, the delegates will meet in Vienna to Safety Act and the Federal Water Pollu- turn that agreement Into a treaty. Their tiori Control Act?the Coast Guard ts progress here is painfully blow; many speak empowered to establish standards higher privately of stalemate. than those in the convention and to en- ORIGINAL GOAL force those standards in our navigable The original goal of the Caracas meeting waters. was to produce a draft constitution for all Three alternatives are being discussed nations. That treaty, it was hoped, would establish new territorial limits and zones of at the conference: First. A maritime control for marine resources beyond the ter- state proposal, supported by the United . ritoria1 limits, and provide some kind of in- Kingdom and France, under which only ternatiohal eattlaority over eN.ploitation of the 11VICO would adopt standards and only deep seabeds, the flag State would enforce; "We're moving but slowee," said John R. Second. A coastal State proposal, stevenson, the head of the United States supported by Canada and Australia, un- delegation. der which coastal States would have the ?it's critical to meet the General Assem- bly goal of a treaty before the end of 19757 right subject to safeguards to promulgate and enforce higher national standards saidne)ereMr. Stevenson's deputy, John Norton for their 200-mile economic zone: But while everyone here puts a good face Third. A proposal, supported by the on what is going on when speaking for the Tinted States, under which a State could record, unofficially the participants in this promulgate and. enforce higher stand- third United Nations conference on the law anis with respect to vessels that Visit its of the seas since 1958 talk of stalemate. ports. In addition, the U.S. proposal The votes are there, says an American would allow coastal States to take action delegate, but the means for setting up a strong international authority for the deep in emergency situations to prevent im- seabeds are not. The private and national minent pollution, and after going interests represented here seem as various through a variety of cumbersome p,ro- and complex as the animal and plant hie of cedures, to enforce against the vessels the sea itself. There are nations with coasts, landlocked nations, powerful nations and underdeveloped nations? all with special axes to grind. 148 COUNTRIES In the main ,ponference hall, a theater that has been converted to look like the General Assembly hall in New 'fork. hundreds of men and women, represeni,ing 148 countries, met daily. They are the core of the confer- favor granting licenses to private Par- establishingence, the experts: most of them have been Lies sponsored by States. Other coun- higher than those adopted by IMCO in working on law of the sea for most of their tries, including most of the world's less both ports and our territorial sea with mature lives. developed nations, would prefer to see respect to coastwise and foreign coin- Andres Aguilar of Venezielti, a veteran (li- the establishment of an international merce. plomat in matters involvine the sea, presides Seabed Authority able to engage in min- In conclusion, I returned from Caracas over these meetings from a podium 10 feet big itself. No explicit agreement has yet with a feeling that the Law of the Sea high, set atop a stage, towering over the dele- gates. In the rear of the great room sits Louis been reached in committee I. Yet, a con- negotiators have taken on an enormous B, Sohn of Harvard University,?who has been sensus appears to be developing about and extremely important task. For they occupied with sea law for 15 years. Toward ;he need for an international regime to have undertaken to establish a new inter- the middle of the room are Joseph Warioha regulate the exploration and exploitation national regime governing the resources of Tanzania, a lawyer who am been working of the seabed beyond coastal State eco- contained in 70 percent of the Earth's on the subjecl; Dye years, Alvaro de Soto. a Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 ugt 3 us , roved For Re_ka..e 2001/09/07 : CIA-RDP75B00380R000500410007-9 cUNGRESSIONAL RECORD ? SENATE young Peruvian diplomat whose entire career IS devoted to,Op search for .a coherent law of thetia., , Their experience and expertise are typical of most Others here, as is their zeal; they meet from early morning to late evening, and they confer While at meals. ? What drives these men and women la a concern that without a new law fa/ the seas., ? nations will assert more and more separate claims on fishing, on sea mining and on navi- gation, leading to International anarchy, new tensions and new conflicts. The president of the conference, Hamilton Shirley Amerasinghe of Sri Lanka, likes to refer to the hoped-for document as a state- ment of agreement, whose language would be couched in actual treaty form, a docu- ment that would fall somewhere between a draft treaty and a declaration of principles. One problem, a European diplomat says, is that such a statement "cannot be hammered out by voting; that would tear this confer- ence apart. If a delegation feels its national interests are being outvoted," he went on, "it might sinaply pick up and leave. This must be done by consensus." , GEOGRAPHY A FACTOR "Tell me the exact geo,graphical situation of a nation." an American delegate said, "and I will tell you its exact negotiating posi- tion at this conference." The United States, which has teamed up on some lasues with other maritime nations such as the ,Soviet Union and Japan is mak- ing proposals along the following lines: A 12-mile territorial limit as long as there is no interference with passage over and under straits. "Territorial seas" no vary from 3 miles to as many as 200. Beyond the 12 miles, an 188-mile economic zone, each nation having exclusive rights there to submarine resources?many such projected zones are rich in oil and natural gas?but not to fish or navigation. Fisheries would operate under the principle of full utilization, international arbiter a would step In when a "host" nation was not taking a certain amount of fish from the area to determine whether other nations might use it. Establishment of SA international agen- cy that would issue licenses to nations or corporations to mine deep seabeds. The oceans are known to contain vast stores of ma,gancise nodules, from which nickel and copper can be deriveil. But only a few nations have the technological ability to do the mining. insrxrr Teams Unity at the conference among about 77 less developed nations varies from issue to issue. Some Latin-American states such as Peru and Ecuador simply want a 200-mile limit. But most of them., the delegates say, lo'ok' for a 12-Mlle "territorial sea" with con- trol over straits and an economic zone of about 200 miles, with exclusive rights to all reSolarces, but not control over navigation, and full international ownership and con- trol of the deep seabeds. . Still another group of about 40 nations, many of them land-locked, want to share in the resources of both the economic zone and the deep seabeds. Then there is a cluster of States like Norway and Australia that want fullOOntrol to the limits of their continen- tal ahelveS. The voting procedure calls for each article to be carried by two-thirds of those present and voting, as long as that is a majority of all 148 nations represented here. But in each nation's proposal, agreement on any one Ware is tied to agreement on all other isSirea. Tble, as Jens Evenson? the head of the Norwegian delegation? sees it, means a queer land of juggling, in which all the balls must be In the air at the same time, long enough for all to see that their Interests are being accommodated. And no nation represented here will mak a fundamental concession until the others dc) As an American delegate put it, "How can we wire Washington asking to make cam promises when no one else around here IS making any compromises?" From the New York Times, Aug. 4, 19741 PROTECTING THE ECONOMY OF 200 MILES OF OCEAN (By Evan Luard) LorwoN.?Discussion at the Caracas con- ference on the Law of the Sea is increasingly focusing on the proposal for a 200-mile eco- nomic zone: that is, an area off the shores of a coastal state, within which it could exercise total control of economic resources, both those within the waters (mainly fish), and beneath them (mainly oil and gas). Already many countries, including both the rich (the Soviet Union, Britain, Australia and others) and the poor (China, most African and Latin-American states), have indicated at least qualified support for the idea. The proposal for a general economic zone emerged about two years ago among African and Latin-American countries. It was pro- duced as a compromise, modifying the more extreme claims of some of the Latin-Amer- ican states to a 200-mile territorial sea in which the coastal state would exercise full jurisdiction for all purposes. Recognizing that this was unacceptable to many mari- time countries as a threat to free naviga- tion, and conscious that economic rights in the zone were what mattered most to them, these countries proposed a zone in which the coastal state would enjoy economic rights only. The idea has since received support from a substantial number of the 149 na- tions attending the Caracas conference. Since most of the world's nations are coastal states and have an obvious interest in acquiring extended economic rights of this kind, it will scarcely be surprising if the proposal eventu- ally wins majority support. Even under the existing laws, many dis- putes have arisen about the dividing line between the seabed zones of neighboring states (between Greece and Turkey in the Aegean Sea, between Britain and France In the area south of Ireland, and between China, Japan and Taiwan in the China Sea). Such disputes will obviously become more fre- quent if a wider zone is accepted. ' What would be the economic implications of an. economic zone? Many of the most val- uable resources of the oceans, both Ash and minerals are found relatively close to the shore. Thus, if generally accepted, the pro- pose' would mean that these resources would be appropriated by the coastal states, espe- cially those with long coast lines such as the United States, Canada, Brazil, South Africa and Australia, many of them already wealthy countries. The United States has nonetheless not so far supported this concept. Washington orig- inally proposed a,more complex scheme under which there wou tn be three economic zones: One would stretch to the 200-meter depth line and would be fully under the control of the coastal state. Another would be a wider trusteeship zone, where the coastal state eculd control exploitation but would share the royalties with the international commu- nity. The third would cover the deeper areas, such as those containing the huge deposits of ferromanganese nodules that could be- come a prime source of copper and nickel, where exploitation would be fully under in- ternational control. One reason the United States preferred such a solution was that it seemed more likely to preserve freedom of navigation in all areas beyond the 200-meter line, a matter of concern to the United States Navy and to S 14763 American shipping generally. The scheme, which covered seabed exploitation only, would also have allowed American fishing fleets continuing rights even within areas Within the so-called "trusteeship zone" of Other countries. United States fishing fleets have for years been in conflict with the governments of Ecuador and Peru, which have from time to time arrested vessels fishing within the waters they claim. The acceptance of a 200- mile economic zone would put those govern- ments in the right and prevent action by the United States Government in support of those fishermen in such cases. It may be that eventually there will be some kind of compromise between the "trust- eeship zone" ideas. For example, the United States might ac- cept a limit of 200 miles for the zone of ? economic jurisdiction, but demand that there should be, as in its own proposals, some sharing of revenues from the zone with the international community. This would help to meet the concern of the 60 or 70 states that are either land-locked or shelf-locked (that Is, their continental shelf immediately abuts that of other states), who would otherwise be unable to benefit from the most valuable areas of the ocean. Without this, such states could only benefit from the international system, which, it is generally agreed, would operate in the outer areas. There an interna- tional authority will take the royalties from exploitation and distribute them to all states with special consideration for poorer coun- tries. The larger the zone taken by coastal states, therefore, the less the proportion of the resources and revenues that would be available to the international regime. A sys- tem by which some part of the revenues in the 200-mile zone, perhaps from the outer half of it, went to the international system would thus represent a fair balance of inter- est between the coastal states and the non- coastal, or partially coastal, states. The question of rights to seabed resources is not the only question to come up at Cara- cas. There has been much discussion on the questions of the breadth of territorial sea, the area fully under the jurisdiction of the coastal state. It is now clear that a majority of states would accept a 12-mile zone. In the case of most maritime countries, how- ever, including the United States, this would be only on condition that there was some guarantee of free navigation for naval as well as merchant vessels through the many international straits that would, as a result, come entirely within territorial waters. A number of the states that control such straits, such as Malaysia and Indonesia, have declined to give this assurance and there may be prolonged disagreement on this point. [From the Washington Post, July 30, 1974] THE LAW OF THE SEAS A pattern of international law, replacing a patchwork, is being laid upon the world's oceans for the first time?at the Law of the Sea Conference in Caracas. The developing consensus would extend the territorial sea of coastal states to 12 miles; establish an "economic zone" out to 200 miles in which coastal states would, with certain exceptions, control fishing and mining; and create an in- ternational program or "regime" outside the 200-mile line to mine the deep seabed as the "common heritage" of mankind. Sharp dis- agreements still exist among the 149 partici- pants at Caracas and there is no assurance that the full text of a treaty will be reached In this summer's session. But it is clear that the old system?or non-system?of rights and responsibilities which has prevailed on the high seas is gone. The very concept of "high seas," open equally to all, is buckling as particular na- tions asset sovereignty or special rights over areas further and further from their Approved For Release 2001/09/07 : CIA-RDP75B00380R000500410007-9 S 14764 and as the international coneutinity collectively asserts certain kinds of author- y over areas further out. If a country hold- ing an offshore island can claim a 200-mile economic zone around it, for instance, then lie whole of the Mediterranean and Carib- eau Seas and about half the Pacific Ocean aecome subject to national claims. To make es deep seabed a "common heritage," more- over, is to Impose new controls there as well. ihese would reduce the existing freedom of erivate or national entrepreneurs in order ea spread the expected mineral benefits to '-,t,.tes not in a position to exploit them t tiernselves. This drive to write new rules for the sea results from the worlds growing hunger for the sea's resources, from the increasing soph- istication of the technology with which to exploit these resources, and from the grow- mg likelihood that nations striving fat them will take arms if law' is not first applied UnturprisinglY, it is those nations enth long coastlines plentiful resources near their coasts (both in the water and under the ?seabed) and advanced technology which are in the strongest position to get what they want from the high seas. More than any other country, the United States has all three. Hue this does not mean it can go it alone. With it great navy and its global political role, the United States needs the right of continued, politically uncluttered transit through the various international straits wind% would fall within one or another state's territorial waters under a 12-mile territorial-sea rule. This is a major goal for the American negotiators at Caracas. Fishing is a knotty problem. Japanese and Russian "distant-water" fleets have grossly overfished haddock and salmon etoeks, for example, off the American coast. Bat tyr14 United States has been reluctant to invoke 200-milaecenunnic zone beciaute its own tuna and shrimp fleets fish within 200 miles of other nations' shores. Washington it row ready to accept the 200-mile Content bue it wishes to keep some fisheries open to its tuna and shrimp fleets and, most important, to ensure that effective conservation and re- source management measures are adopted all around, As to a deep-seabed international regime to extract minerals for the "common heritage" the United States would have the new au- thority to simply license the exploiters lend distribute the licensing revenues. But tee Chinese, seeking a Third World leadership role, would arm the authority with the power to do the exploiting itself. American fishing, gas and oil, mining and maritime operators naturally hate a strong commercial interest in ariy new international rules of the sea, just as the U.S.. government has a strong diplomatic and military inter- est. These interests, complex and soinetimes contradictory, are all reflected in the Amer- ican proposals at Caracas. Some mining and Itching groups have persuaded Congress to draft legislation that would, if enacted, pre- empt international decisions on c rueial is- sues. Wisely, Congress has not acted on this legislation, The United States as much as any nation, needs the cooperation of 'others an the high seas. It can hardly expect to get such cooperation--indeed, its exa mple will only breed conflict?If it acts alone. Approved For Release 2001/09/07 ? CIA-RDP758 N 0005004109- CONGRESSIONAL RECORD -- SENATEgas,' 13, 1971- tocks has prompted legislation, such as Senator Matierusoer's bill, S. 1988, to ad- dress the problem on an interim basia by declaring a .200-mile resource zone. Meanwhile, Mr. President, the eco- nomic gone concept has emerged as the preeminent and pivotal issue before the Caracas conference and until an agree- ment is reached, debate on other policies will not proceed expeditiously. Ambassador Stevenson has also stressed passage of military vessels and aircraft through and over international straits as an issue of major concern. Not only unimpeded transit but nondiscre- tionary transit is essential to insure un- restricted passage in terms of ship type-- submarine, supertanker, nuclear pow- ered?and destination of cargo. Currently however, debate on these urgent issues has not produced the sub- stantive results anticipated. The licens- ing aspect of the seabed question has stalemated in committee 1. Committee 2. discussing the economic zone, may com- plete this session with only a comparative table, not significantly different from the Seabed Committee's report avail- able at the beginning of the conference. Scientific research, handled in committee 3, may not only be subjected to regula- tion inside national jurisdiction, but out- side as well. Ambassador Stevenson has expressed several misgivings concerning the pres- ent 'dim of disc'ussiOns. Canada, Chile. Iceland, India, Indonesia, Mauritius, Mexico, New Zealand, and Norway have proposed that articles be drafted as a framework for discussion of archipelagic state's rightS, territorial sea, economic zones and the continental staff. Ambas- sador Stevenson, however, holds that these proposed articles are too general for use as negotiable items. High seas freedom, particularly ger- mane to the question of passage through international straits, has not been clearly preserved in proposals under considera- tion, according to Ambassador Stevenson. In. addition, the Ambassador expressed reservations concerning the lack of com- pulsory dispute settlement provisions and absence of state duties insuring conser- vation and full utilization of fish stocks. Freedom of the seas has been funda- mental to international law since the Dutch jurist Grothis established the principle in 1609. That principle however, derived from Grotius" view of a limitless expanse which "can be neither seized nor enclosed," is not viable in a world of dis- parate interests seeking to exploit the ocean wealth. The major issues of re- sources, rights, and responsibilities im- mediately concern the nations of the world, and the Law of the Sea Conference is seeking to update ocean law to accom- modate current and fin are world needs. Substantive progress in this direction. however, does not seem readily forth- coming. While the final Law of the Sea Treaty should receive our close attention and hopefully provide a step forward in an international approach to global needs, the self-interests of the United States in vital issues of ocean policy must not be ignored in our efforts to achieve international agreement.. Mr. President, in order to provide a complete report for my colleagues on the Tfal need to reach a balance which enables 5; us to exploit the riches of the sea while pre- serving the interest; of all ... We muet try to ensure that the new law of the sea will en- dure as the foundation of man's uses of the sea. Mr. President,. 1: would like to report to my colleagues on progress to date at the conference which will draw to a close on August 29 after a 10-week session. Ambassador John R, Stevenson, Spe- cial Representative of the President, has headed the U.S. delegation with John Norton Moore serving as Deputy Special Representative. Included in the Ameri- can delegation are 13 alternates, 16 Sen- ators and Members of the House, 6 ed- ucators, 10 congressienal staff members, 20 official advisers and a group of ex- perts on petroleum, hard minerals, in- ternational law, marine environment, fisheries, marine science and maritime industries. The opening days of the conference were primarily devoted to organization and procedure. The conference general committee designated three committees to handle issues under consideration: Committee 1?seabed regime; commit- tee 2?economic zone and all other agen- da items not assigned to committees 1 and 3; and committee 3--pollution and research. The plenary session was as- signed topics of peaceful uses' Of the ocean and universal participation in the Law of the Sea Treaty. All committees have considered first, regional isxrange- merits; second, responsibility and liabil- ity for damage to the marine environ- ment; third, Settlement; of disputes; and fourth, peaceful uses of the ocean. The conference established complex rules of procedure whereby a gentle- men's agreement rather than a vote has bead predominantly operative. Rules Permit deferment of voting on substan- tive matters until all possible efforts at compromise have been used. General debate, which began on June 28, has addressed a range of issues: ter- ritorial seas, transit through interna- tional straits, Protection of the marine environment, compulsory settlement of disputes and creation of an international regime for nondiscriminatory licensing and exploration of the deep seabed. Particular attention has been focused on consideration of a 200-mile economic zone owing to substantial fisheries inter- est here in the United States. The eco- nomic zone being discussed in Caracas would extend coastal State control of ma- rise mineral resources within' and beneath adjacent waters, while guaran- teeing freedom of navigation and allow- ing foreign fleets certain rights to fish within coastal waters. While supporting this 200-mile economic zone, the U.S. delegation has called for compulsory third party settlement of disputes. This has elicited obiection from several Coun- tries and is now being debated. The 200-mile coastal State control would replace tae traditional 3-mile limit established in the 17th century and sub- ,sequent delineation or a contiguous 12- in le resource zone established in more t recent years. Present depletion of various epecies of fish coupled with inadequate s and ineffective international agreements to conserve and manage threatened fish THE INTERNATIONAL LAW OF THE SEA CONFERENCE Mr. HOLLINGS. Mr. President, toe Third International Law of the Sea Con- ference has been underway this ,summer in Caracas, Venezuela, to midst? ocean law, essentially unchanged in 250 years United Nations Secretary General Km Waldheini delivered an Openir g speech which underscored the purpose of thi conference-- Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 Approved For Release 2001/09/07 : CIA-RDP75B06380R000500410007-9 4 CONGRESSIONAL RECORD ? SENATE S 14765 Caracas Conference, the Subcommittee "some of the powers that don't have any ex- The White House press spokesman on Minerals, Materials, and Fuels, chaired cuse have less than a sense Of urgency." made the following statement on behalf by Senator LEL AtETCALF, Democrat of "I think a treaty is imperative," Mtufkie affirmed, "I don't believe that unilateral of President Ford just before the vote: Montana, and the National Ocean Policy action is the solution." The Government and people of the United Study will participate in a hearing Sep- lie conceded, however, that the American States welcome the agreement reached in tember 17 to receive a report from the fishing industry does not think anything win principle on August 9 between the Portu- U.S. delegation to the Law of the Sea come out of the conference and regards uni- guese government and representatives of Conference. Senator 1VIercal.r, who will lateral action by Congress as the only Guinea-Bissau. We extend our congratula- chair the hearing, is the Interior Corn- solution. August 13, 197 mittee representative on the National Ocean Policy Study. Specific issues to be discussed during the hearing will include the proposed 200-mile limit, deep seabed mining, pas- sage of vessels through straits, ocean pol- lution and other subjects under debate at the conference. Senator Murcur is the author of S. 1134, the proposed Deep Seabed Hard Minerals Act, which would authorize Federal licenses to companies desiring to engage in mining for manganese nod- Ules on the floor of the ocean well beyond present jurisdictional limits of the United States. ?The National Ocean Policy Study joint hearing, subject to later change, is scheduled to be held at 10 a.m., Septem- ber 17, in room 3110, Dirksen Senate Office Building. LAW OF THE SEA CONFERENCE Mr. HOLLINGS, Mr. President, last week, three of our colleagues, the Sena- tor from 1VIRine (Mr. Muslim) , the Sena- tor from Rhode Island (Mr, PELL) , and the Senator from Alaska (Mr. STEVENS) attended the third U.N. Law of the Sea Conference, held in Caracas, Venezuela. In their discussions with our negotiating team, as well as with foreign delegates, all three Senators stressed the need for speedy conclusion of a treaty to protect fish stocks off the coasts of the United States. Mr. President, I ask unanimous consent that an article from the Caracas Daily Journal describing the Senators' discus- sions at the conference be printed in the RECORD. There being no objection, the article was ordered to be printed in the RECORD, as follows: [Prom the Caracas Daily Journal, Aug. 7, 1974] U.S. SENATORS STRESS NEED TO PROTECT NATIONAL FISHING Concerned over the sluggishness of the proceedings at the Third U.N. Conference on the Law of the Sea, Senators Edmund Mus- Me of Maine and Ted Stevens of Alaska yesterday stressed the need for a treaty pro- tecting national fishing waters. ' Both Benators favor the establishment of S 200-mile economic zone protecting vast U.S. fishing interests operating off both the Atlantic and Pacific coasts, but expressed dis- tions to the leaders of both governments. Stevens, who concurred with Muskie's We look forward to a productive and bleak assessment of the chances for a friendly relationship with Guinea-Bissau. treaty, supported unilateral Congressional I have instructed our representatives at the action imposing an "interim" 200-mile eco- United Nations to support the application nomic zone to protect the American fishing of Guinea-Bissau for membership in the industry while the treaty is being hammered United Nations. out. According to Stevens, stocks of Alaskan pollack, halibut, and salmon have been severely reduced by Russian and Japanese fleets fishing within 200 miles of the North American coast. Stevens insisted that the imposition of a 200 miles zone will force Japanese fishermen to abide by the tough Alaskan marine con- servation laws, something which he claims they have so far ignored. The Japanese, he charged, do not observe seasonal bans imposed on American fisher- men in the case of salmon, they do not ob- serve the practice of harvesting only part of a particular run, and therefore threaten the obliteration of the species; they use trawling gear "which literally vacuums the bottom of the sea, and they fish for salmon on the high seas, which he considers a dan- gerous practice. Stevens reasoned that if the United States had a 200 mile preferential economic zone, the U.S. could demand that the Japanese abide by Alaskan conservation standards be- fore granting them access. If the zone is established unilaterally rath- er than by treaty the United -States would have to enforce the limit, something which Stevens contended could be done. "We are very sincere about it," he said. "We can enforce it." For Stevens, Japanese salmon fishing on the high seas presents one of the most serious threats to the American salmon in- dustry. Stevens explained that salmon make runs from the rivers where they were hatched to the high seas and they intermingle with salmon from other hatching areas. When they are ready to lay eggs they return to the hatching place of their origin in fresh water. If the salmon are fished on the high seas, as the Japanese are doing, Stevens said the danger exists that entire communities of the fish will be obliterated since several runs of salmon often swim together and cannot be distinguished from one another. If, however, the salmon are caught as they return from their hatching grounds in in- dividual runs, part of a run will be spared so that the first may propagate. Destroying entire communities of the fish in the high seas may place the entire species in jeopardy. Stevens contended that even though the Japanese do much of their high seas salmon fishing beyond the 200 mile limit, the vast majority of their entire fish catch is made within the zone. Americans can be proud of our partici- pation in this momentous decision by the Security Council. About 90 countries had already recognized the Government of Guinea-Bissau at the time of the vote. Portgual herself had announced that she would recognize the new republic's independence soon and had supported its admission to the United Nations. It was clearly appropriate that Guinea-Bissau's right to official membership in the com- munity of nations be recognized at this time. In welcoming this significant step in the decolonization of Portuguese Africa, we must pay tribute to the courage, the patience, the good will, and the states- manship of the new Government of both Portugal and Guinea-Bissau. Both sides have shown great patience in nego- tiating differences, a willingness to take all the time necessary to work out a settlement that will be fully satisfactory to all. In the negotiations, it is apparent that both sides have worked for an agree- ment that would have the solid support of all the people of both countries and that would leave no wounds on either side. In Guinea-Bissau itself, judging by reports we have seen over the past week soldiers on both sides have used the nego- tiating period not to try to improve their military positions but to work together in preparation for independence. Portu- guese soldiers have received assistance from liberation movement fighters. The elected Government of Guinea-Bissau has been encouraged to organize polit- ically in the areas that were previously controled by the Portuguese. While the problems of achieving a just and secure independence for Mozam- bique and Angola are much greater than for Guinea-Bissau, it is clear that nego- tiations on the future of these territories are proceeding in the same spirit of good will, patience, and respect for the interests of all involved. There is no doubt, with overwhelming world support for this 'evolution toward independence, that these two countries will soon join Guinea-Bissau as members of the The Senator argued that access to the y over e lack of progress at the Law of United Nations. the Sea Conference here. zone could be used to pressure the Japanese "We've got groups, people, human beings to ban high seas salmon fishing. I hope that the United States is giv - The salmon runs which have been de- ing its full support to the process now whose ability to live have been put in jeop- aro by depletion of fishing stocks princi- pleted so far, Stevens said, can be replenished, underway that will enable these terri- saying ouch!" but only if action is taken immediately, tories to finally take their rightful place pally by two countries," said Muskie. "We are Nruskle, in Caracas "to get a flavor of the Conference," said. that riot only do the pro- ceedings seem to be slower than expected, but -that there also exists the disturbing pos- sibility that a treaty may not be produced at all. Noting that the participating countries have had about five years to prepare for the conference here, Muskie contended that among the independent nations of Africa Our Government should be in constant U.N. MEMBERSHIP FOR GUINEA- contact with all the participants in these BISSAU negotiations and with various groups in Mr. HUMPHREY. Mr. President, the ? Portugal and the territories. We should U.N. Security Council yesterday recom- make clear to them our support for their mended unanimously that Guinea-Bissau efforts to achieve an independence settle- be admitted as the 138th member state ment that is fair to everyone and offer of the United Nations, our assistance in overcoming any ob- Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 I Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 .4. S 14766 CONGRESSIONAL RECORD ? SENATE Augwt 13, 1974' stades that might emerge. We shotlei vindicated those'who expected that he might MOny supporting restricteve procedure' support Illi. efforts to assure that mi- become, attar the coup, a "Porlanguese de for White House access to tax returns. Gaulle," a leader with the vision and stature noeitY rights are respected in this memo; the Administration has censistently loin to Indus* his country to cut old lasses and and that the independent governments bled against the Senate amendment, de- seek new gains. The whole international have the full support of all their people, community has an interest in encouraging crying its possible interference with nor- Finally, we should begin evaluating the like the both countries in the West which, mal Federal agency procedures, and also assistance needs of these territories in ididB'tcatr, are friends and allies azpriccimnolvallnegdgietsoawnbuses, legislation to remedy building a strong economic and political of Portugal, a er countries which pro- base for independence and make Clear claim themselves ' the champions of anti- 3: do not believe these arguments our intention to join with other nations eolenialism? against the Senate arnenement are valid to help meet these needs. The United Nations deserves special note, or convincing. Nevertheless, in the con-Thein- Secretary General, acting at the behest Mr. President, I ask unanimous of the General Assembly, has played a can_ terest of accommodating objections of sent that a Washington Post editorial of tral part hi facilitating talks between the the House and the adtninietration against August 12, entitled "The End of Poral- former antagonists in Lisbon and Africa. the Senate tax return amendment, I will gars Empire," be printed in the RECORD. This has surely helped ease what was bound offer a modified amendment which nar- 'Mere being no objection, the editorial to be a difficult transition in the best of cir- rows the restriction on access to tax re- was ordered to be printed in the RECC an, curnstances. The United Nations' more diffi- turns to White House Office staff, cult tasks, however, remain. It must help as follows: rather than the entire m ecutive branch. THE END OF PORTUGAL'S E1APLRE stimulate the nationalists in Mozambique and Angola to had a referendum, or it must The modified amendmeet reads as fol- with courage and style, Portugal is cutting provide another mechanism to assure that lows: the knot of its African empire. Barely 100 the people of those territories have some S. 113. Limitation upon sccees of White days after the coup which removed EUTO'le'S choice in approving the government that House Office personnel to tax re- hardiest dictatorship, the new government wilt rule over them. The United Nations must led by former colonial General Antonio de turns. also try to secure some guarantees for the Notwithstanding any other provision of Spinola has declared itself ready te transfer European and Asian Minorities. If the proc- law or any regulation made pursuant there- power "to the populations of the overeats ess of decolonization in Portuguese Africa to, no return within the meaning of 26 provinces who are recognized to be qualift ed." starts to turn sour, as it yet could, the world U.S.C. 6103(a), including any information There is some ambiguity in these nords, but body will then have to face the question of of any kind appearing on such a return, there is also much responsibility. Lisbon's how to fulfill the international will over the shall be open to inspection by, or disclosed concern Is net merely to let doter the 11Th" opposition of some of the parties involved, to any officer or employee in the White House manse burden which Its eolonies of 600 But the more salccesSful its mediation now, Office, other than the President personally years have become, but to do 130 ra a way the less likely that it will have to cross that upon written request made to the Secretary that leaves the new nations-to-be as well bridge. of Treasury or his delegate. prepared as possible to cope on their own. It _._.........--__ Is heartening that President Spinola's offer . ... This modification should reasonably to transfer power is being received by Afri- RESTRICTENCr WHITE HOUSE STAFF can nationalists as an offer made in good ACCESS To TAX RETUE,N8 Preclude any questions of its germane- ness to a White House Office Personnel faith, It Is no surprise 'that GuLnea-Tlissan, on Mr. WEECEZER. Mr. President. on Au- bill which, among other sections, au- west Africa's bulge, Is to be the first of the gust 7 ,the Senate tabled the confer thorizes additional White House em- ' colonies toreceive full independence and en- report on the White House office per- Ployees who "shall perform such official duties as the President may prescribe." 'ter the United Nations. The forces of the lib- sound l bill by a vote a 54-34, for the eratton movement there had already reduced POrtaglieSS control to a few enclaves. The reason that a Senate amendment re- I submit that this modified amend- stricting executive branch access to tax merit would achieve an important and colony had become an economic liability to returns, approved duly 18, had been de- necessary reform aimed at questionable Lisbon. An elected government Ls already running the liberated zones. More than 80 leted in conference. On August 8, Chair- practices uncovered in recent Senate in- states have recognized an independent man McGEE called for a new conference vestigations. I know of no compelling Guinea-Bissau. The government of LUIS Cab- on the bill and Senate conferees were rationale for White House aides to have ral claims but does not control the offshore appointed with instructions to insist on access to any tax return.; or the informa- islands, Including Cape Verde?B. strategi- the Senate amendment. tion contained therein. Should the Presi- eally situated archipelago whose political fu.- Nevertheless, the House on Monday, dent require tax return information to tare remains tel). negotiated. August 12, acted in effect to send back fulfill his official duties, he may make a In lienzezehique, in east Africa, Liebon has personal request in writing for such the in- pledged to start negotiations withthe original conference report without nr material from the IRS. cipal rebel group, Prelimo. An -undeclared the critical amendment relative to t ax oea,se-fire is largely in place, thanks to the returns. This parliamentary maneuver In tabling the conference report last Portuguese army's reluctanee to fight on and by the House returned the same legis- week, the Senate stood firm in support Prelimo's good sense in accepting accom- lation in order to circumvent the new of reform necessary to restore the in- modation. Several hundred thousand whites conference duly called for by the Senate. tegrity of our Government. live in Mozambique; the families of Borne By concurring in Senate amendments With the House playing parliamen- have been there hundreds Of years. As Pr(- to H R 14715 but deleting the tax re- tary games and the administration waf- ress toward independence is being made, , ? ? Lisbon is understandably eager to care for lcara section, the House is clearly ques- fling on needed reform., let the Senate their legitimate interests. Any sign o toning the Senate's resolve in twice up- now reaffirm its commit ment to the fun- tuguese support for the white secessionist holding a reform to strengthen the rights liamental principles of constitutional movement which is budding in Mozambique of the individual Under the Constitution. democracy. could, of course, backfire badly I urge my colleagues in the Senate to Let us now for the third time in as ,,Angola, on the white coast of the conti- send a message to the House that we will many weeks, express our support for nent, is at once the largest, most populous not play parliamentary games with the restricting White House tampering with and richest Portugrese colony; the one where confidentiality of every American's tax confidential tax returns. the Portuguese exercise the most control and return. ? where the rebels are the most spilt among When the so-called "House amend- themselves. It Is also the one harboririg the FOOD, NATURE, AND TECHNOLOGY most serions possibility of a black secession- ment" comes to floor later this week, I let effort?Cabinde, a small territory with intend to move to concur in the House Mr. KENNEDY. Mr. President, one of high promise of a great deal of offshore oil, language with an amendment restoring the most pressing problems which all na- This will be the meet difficult colony to de- the Senate's provision tightening access tions must confront together during the colonize. The government in Lisbon. has TO tax returns. years ahead is the grim prospect of acute made a start by opening contacts with An- In opposing the Senate amendment, international hunger. More and more na- golan rebels. The House conferees raised questions of tions are succumbing to a common mal- Preeident Spinelli has aptly called Lisbon's the germaneness of the Senate amend- ady of severe food shortages as the ex- decoke:even decision a "victor3r ova' our- selves." His government till faces difficult merit, arid indicated that the Ways and plosion of world papule lion and devestat- S tests at home. Not all Portuguese are as per- Means Committee was studying possible ing natural disaster swell food demand ceptive as he in seeing the necessity of join- legislation in this area. And, in spite of and this soaring need for food only serves ins the modern age. He has, however quite the IRS Commissioner's public testi- to drain what little toed reserves existed Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 ,1.--urbe 17 1974. Approved For Release 2001/09/07 ? CIA-RDP75.5100M000500410007-9 CONGRESSIONAL RECORD SEN these services, they receive no share of the royaliies. This is in direct conflict with Iong-eStablished revenue iharing procedures in effect 'for royalties received in ckrinection with Mineral exploration and production fr lands. Mr. President, it is fair sitUation correc tinental Shelf oil and gas Crease dramatically in t years as this country strive self-sufficient in energy pro the States off whose shores this takes place are to provide govern services essential to the people an dustries engaged in the work, they m ? have a share of the revenue derived fro it. An editorial printed in the Anchorage Daily Times On June 12 discusses this Issue in detail, especially as it relates to Impending expansion of offshore oil and gas production in the Gulf of Alaska. I urge the Congress to recognize the urgency of this matter and to act as quickly as possible to complete work on S. 2389. .; ask unanimous consent that the An-, chorage Daily Times editorial? of June 12, 1974, be printed in the RECORD follow- ing my remarks. There being no objection, the editorial was ordered tO be printed in the RECORD, as follows: _SHARING OFFSHORE DOLLARS As interest Mounts in federal offshore leas- ing of petroleum tracts in the Gulf of Alaska, pressure also should increase on the Congress to correct an obvious flaw in the way reve- nues from such leases are handled. Unfortunately, the desire for a summer recess plus the embroilment in the Water- gate affair threaten to give a low congres- sional priority to what Sen. Ted Stevens, Gov. William A. Egan and many others have cited as an urgent problem facing all states where offshore drilling activity is either in progress or contemplated. The problem is simple to explain. All money accrued from petroleum or mineral leases on offshore public lands?be it in the form of bonuses royalties or leasing fees?goes directly into the federal treasury. None goes to the adjacent states which must support the offshore activity through in- creased public services for schools, police protection, park and recreational expansions, sewers and all the other attendant needs of population booms. This is in direct contrast to what happens to revenues derived from onshore drilling activities on public lands. The discrimina- tion is substantial. The solution to it is not the elimination of revenue-sharing by states affected by onshore; drilling, but rather by extension of the concept to offshore revenues. As things now stand, the Mineral Leasing Act of 1920 grants states 37.5 per cent of revenues from, public lands within their borders in compensation for their support of public facilities. To use a term now current In Alaska, the money offsets the "impact" of exploration and production activity. Alaska already benefits greatly from this onshore assistance. But unless there is a change in the law, the vast impact of offshore operations in the Gulf of Alaska will hit the state?and coastal communities which become support centers for the operations?with a severe blow. Gov. Egan has called repeatedly for an amendment of the federal law to correct this situation, Sen. Stevens, another strong ad- on-shore public h time this un- Outer Con- sing will in- next few become tion. If asing ntal n- vocate of granting the states a share of off- shore operations, is the sponsor of one of four bills dealing with this situation now pending in the Senate. George W. Healy Jr., retired editor of the New Orleans Times-Picayune and a leading national spokesman on the subject, has pointed out how this discrimination has hit home in his state: ". . . rt costs the State of Louisiana con- siderably more to provide governmental serv- ices for people whose work is involved in operations three miles beyond our coast than the state receives in taxes as a result of these operations. We collect no severance tax on oil and gas produced three miles off our coast, although the severance tax is the mainstay of Louisiana education financing. We do not collect even sales tax on goods and materials used or consumed on the offshore rigs." This same situation will develop in Alaska ess the law is changed. OUGHTS ABOUT FIGHTING INFLATION Mr. ?LE. Mr. President, with infla- tion clea the leading concern of the American ople today, many cures and remedies ha been suggested. Curiously, e would contend that the way to fig inflation is to increase Federal spendin ? d expand many Gov- ernment program *put I believe the ma- jority of our people" re thoroughly con- vinced that this ye outflow of Uncle Sam's capital is the r cause of the in- flation problem. I agree with this view :11.. believe that the elimination of ? ssary and wasteful Federal spending long with a balanced budget?is the way a sound and stable economic c te can be achieved. I was interested, therefore, the June 10 comment of the Salina, s. Journal. In an editorial entitled " for Inflation" the Journal set forth s exal sound ideas about the necessity a strong "home base" in our domestic economy which I believe are shared by millions of Americans today. These thoughts merit widespread consideration in the Senate as work on the appropria- tions bills for the coming fiscal year ap- proaches, and I ask unanimous consent that this editorial be printed in the RECORD. There being no objection, the editorial was ordered to be printed in the RECORD, as follows: OGRE FOE INFLATION Inflation and interest rates are greater national problems today than Watergate. They can lead to an economy wrecking blow- up. Congress can do something about them. Here's how: Two of the inflationary federal programs are foreign aid and military procurement. In some ways, they are tied together. Both spend money the U.S. Treasury does not have. That creates debt and rubber dol- lars. The Treasury must borrow at higher and higher interest rates. That boosts inflation and bank rates. Although some of this spending comes back in the form of wages and profits to American labor and industry, little that it produces is useful. Not much is made that we can wear, eat? drink, drive or fiddle. Too much is designed to go boom. The wages and profits step up consumer demand but do not increase the goods that S 10699 consumers want. Excess of demand over sup- ply is a classic cause of inflation. To the extent that it produces only paper work, any governmental spending is infla- tionary. But foreign aid and military spend- ing are special and excessive examples. But isn't national security involved? Shouldn't we be able to blow up the Rus- sians faster than they blow us up? Shouldn't we fulfill those secret commitments to the crooks in South Vietnam? On the contrary, if our role as a super- power and sugar daddy to the world is to result in bankruptcy and bread riots at home, is it worth the price? Furthermore, we can undo all our do- goodism by leading the world into depres- sion. It already is heading there and our own inflation is one cause. If Congress cut out at least part of this spending, shrunk the appropriations for aid and for airplanes that don't fly, ships that don't float and generals that don't fight, what more could it do? More than reducing the federal debt? Among our greatest shortages are those in energy and housing. Some of the billions. saved could be turned to low-interest loans for home construction and utility improvements. Ample precedent and methodology exist for both type of loans. Why bail out the public utilities? To meet increasing energy demands they must make capital expansions financed today at an enormous cost. Publicly regulated, they can and do secure approval of rates that pass these excessive finance charges on to the consumer. Low interest loans to utili- ties could cut consumer bills. Stimulation of housing and utility devel- opment also would tend to compensate for any reduction in employment caused by a shutdown in military hardware. Skills re- quired to make turbines and guns are not dissimilar. Turning swords into plowshares may not appeal to a Pentagon-fed Congress. Re- duction of aid may not fit Mr. Nixon's dreams of world power. However, the prime essential of any mili- tary or diplomatic program is a strong home base. And our home base now is grievously threatened. If these notions make sense, tell Jim Pear- son, Bob Dole and Keith Sebelius. - THE LOCKHEED-TEXTRON REFINANCING PLAN M CRANSTON. Mr. President, I would ke to call my colleagues' atten- tion to matter which might have es- caped th notice in the press. -For ma months, rumors have circu- lated that kheed Aircraft Corp. was once again 1 erious financial difficulty and would soo ome to the Government for another ba t. Apparently that will not be the case. n June 3, Lockheed announced a tent ye plan to refinance its long-term deb The plan would bring $100 million of w equity to Lock- heed, financed largel y the purchase of 12 million new co on shares of Lockheed by Textron, In On the surface, it 1 to me as though the plan would brin needed new capital to Lockheed job ecurity to thousands of employees at Lo eed and its major suppliers and subco tractors, and perhaps an end to the nee or the Government's $250 million loan ? ran- tee, in effect since 1971. The plan is subject to the approva of Lockheed's banks and other creditors and the shareholders and directors of both Lockheed and Textron. If these Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 ..,rS 10700 19/7 Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 CONGRESSIONAL RECORD --- SENATE groups find after careful study that the plan is as advantageous for all con- cerned as it seems to me on the basis of a superflaal reviev., I trust they will approve it. Mr. President, I ask unanimous con- sent that the pres3 release issued by Lockheed Corp. to explain the arrange- meat, be printed in the RECORD. There being no obJection, the press re- lease was ordered to be Printed in the RECORD, as follows: LOCKHEED, TEXTRON DIRECTORS APPROVE TEN- TATIVE PLAN FOR REE TRTICTURING LOCKHEED DEBT BURBANK, Ceara., June 3?Daniel J. Haugh- ton, Chairman of the Board of Lockheed Air- craft Corporation, and G. William Miller, Chairman of the Board of Textron Inc., joint- ly announced today that their respect ve Boards of Directors have approved a tenta- tive plan which would include an equity in- vestment by Textron in Lockheed and a re- structuring of Lockheed's debt. Mx. Miller Indicated that Textron has held talks con- cerning the plan with Lazard Freres Is Co., Lockheed's financial advisor, and also with some of the Lockheed lending banks. The plan contemplates a new equity in- vestment in Lockheed of $100 million, of which Textron Would provide $85 million by acquiring 12 million new common shares of Lockheed at $s per share and ,$25 million of a new Lockheed preferred stock. The remain- ing $15 million would be provided by a rights offering of 3 million new Lockheed commen shares to Lockheed shareholders at $5 per share to be 'underwritten by Lazard. After the purchase of 12 milion shares of Lock- heed common stock, Textron would OA about 45% of the approximately 26.4 m lion Lockheed commen shares then o standing. It will be a condition of the plan th the Lockheed lending banks convert $27 mil- lion of the present $620 million L kheed bank debt into the new Lockheed eferred stock, and confirm a bank credit 3 Lock- heed of $375 million. In addition to the Infusion of w equil,y, the plan would result In a signant reduc- tion of Lockheed's debt serv e costs and would improve cash flow d tn eral years. Under the plan, Locahee as a as sparebte corporation of the: ew financial al-1PP lending banks, Textron holders. The stock of Textron would be hel there would not be tion of the two co tions would not be Except for Mr. and chief exeeuti the premosed rec which time Mr. chairman, no merit of Loc Miller will co executive ofil Text *on I tal assets of $1.9 b of $100 One 0 Is to gi TriStal' gram. the the he next sev- ould continue ith the benefit provided by the d Lockheed share- kheed acquired by for investment, and Merger or cousolida- asales. Textron opera- ated in any way. ler becoming chairman officer of Lockheed after italization is finalized, at aughton. will become vice er changes in the manage- ed are contemplated. Mr inue as chairman and chief of Textron. diversified company with to- .3 billion, and with 1973 sales n and net income after taxes .5 he primary purposes of the plan additional support to Lockheed's 1011 commercial air tramp ert pro- he TriStar is an important part of fleet of many major airlines around rld. In order for the plan to become etre ive, It would be a condition that stif- fie t, airline second buy options he con- ed into firm orders, or new orders be ained, to bring the TriStar program to total ot 180 Arm production contunitinentse eluding the '74 airplanes already delivered, s. Cumulative orders to date total 202, indul- t lug 135 firm orders and 67 second buy op- times. It is contemplated that the TriStar program will run to at least 300 aircraft over its entire lifetime, extending well into the next decade. Under the proposed plan Lockheed would und,ertake to adopt a change in accounting policy by writing off certain non- eeurring costs related to the TriStar p ?. These non-recurring costs have alrea been ex- pended and are currently be amortized by Lockheeed. over the, plann 300 airplane program. It is estimated at under the amended accounting poli , the write-off which would , be charged ? Lockheed's in- come in 1974 as a cond on to and before the plan becomes itilec would amount to approximately $300 on net after pro- viding for the antici d related tax bene- fits. It is anticipate that in future years the TriStar progra Would operate near a breakeven after al barges. With continua- tion of Locichee other substantial and profitable progra is, this would permit Lock- heed to return o greater profitability. Lockheed's .erations include Lockheed Missiles and pace, located in Sunnyvale, California, ich produces fleet submarine ballistic m' es such as the Poseidon, satel- lite space e:hicles and other research and developm t projects; Lockheed-California, with pla a in Burbank and Palmdale, which in addi ?n to producing the 'TriStar L-1011, design Rnd manufactures military aircraft Such the P-3C Orion and the S-3A Viking; Lock eed-Georgia, located in Marietta, which des a and builds large military and corn- m' ial airlift and cargo aircraft such as the C 30 Hercules; Lockheed Aircraft Service, th headquarters in Ontario, California, "inch is the nation's oldest and largest air- craft maintenance and Modification firm with operating branches around the world; and a number of other divisions. The plan is intended to assure availability of sufficient capital so that these Lockheed operations will not be restricted by lack of adequate financial resources. Many Lockheed programs are essential to national security and represent some of the most advanced technology in the world. The suggested plan Contemplates release, on terms satisfactory to the parties, of the U.S. Government loan guarantee for Lock- heed which was approved by Congress in 1971. The proposed support from private banks and private industry should assure continued vitality of Lockheed as a unique and vital American enterprise. With the restructuring of debt, it is ex- pected that Lockheed would 'be able to gen- erate sufficient cash over the next few years to make substantial reduction in its senior securities and maintain itself on a sound financial basal, The preliminary plan, if accepted and im- plemented, would be subject to approval by Lockheed's banks and other creditors and by Lockheed and Textron directors and share- holders. It would also be subject to several other conditions, including agreement by Rolls-Royce as engine supplier to continue its support of the TriStar L-1011 program, and approval of various U.S. Government agencies. It is expected that closing would occur by ISO November 1974. THE CARACAS LAW OF THE SEA CONFERENCE Mr, FANNIN. Mr. President, on the 20th of June this year, representatives of more than a hundred nations will gather in Caracas, Venezuela, under the auspices of the United Nations for a Law of the Sea Conference. One of the most Important items of the agenda will be the formulation of guidelines clearing the way for exploitation of the mineral ,1 ul le 17, 19 74. resources of the deep seabed before we are faced with a mineral crisis as serious as the energy crisis now upon us. The nature of the mineral problem, the ex- tent of the deep sea resources available with our present advanced technology, the salient points of the very fair Amer- ican position at Caracas and the alterna- tives open to us are set forth with great clarity in a carefully researched article entitled "The Worlcrs Greatest Strip Mine" which appears in the February Issue of the Navy League's Sea Power magazine. I cannot overemphasize the Importance of the subject dealt with in this article which I would like to share with my colleagues and with readers of the CONGRESSIONAL RECORD. Mr. Presi- dent, I ask unanimous consent that aforementioned article are printed in the RECORD. There being no objection, the article was ordered to be printed in the RECORD, as follows: THE WORLD'S GREATEST Bran, MINE?A TRIL- L CON-TON GOLCONDA OP LAND-SCARCE METALS IN THE DEPTHS OF THE SEA (By Merle Macbain) Merele Macbain is a retired Navy com- mander and a former public affairs officer on the staff of the Oceanographer of the Navy. "rhe real extent of our dependence on mineral resources places iii jeopardy not merely our affluence but world civilization." This is the Milling conclusion of the au- thors of a new and definitive asessment of American mineral resources commisiohed by the U.S. Geological Survey. The 722-page re- port--which bears the challenging title "Professional Paper 820"?has received only passing mention in the daily press, however. The subject had better not be dropped there, and if seine of the bolder American mining tycoons have their way it won't. But the most likely solution to a same part of the "mineral crisis" poses some etaggering prob- lems, the least of which are technical. Some of the relevant facts are undisputed. The United States, rapidly becoming if not already a have not nation, Is now importing, in whole or in part, 69 of the 72 raw ma- terials vital to the present high American standard of civilization.. This is on the au- thority of Helen Deitch Bentley, the salty and indefatigable chariman of the Federal Maritime Commission, who points out that virtually all raw materials imported must come in by ship. Four of the most essential of Mrs. Bent- ley's list of 69 vital raw material imports are manganese, nickel, copper and cobalt, and for various reasons deserve special attention. Manganese?the fifth most widely used metal in the world. This ferroalloy serves as a scavenger in extracting impurities in the manufacture of steel and in sum alloys with steel to make it durable and tough. When a nation can do without steel it can do with- out manganese. But the United States, which definitely cannot do without steel, produces no, repeat no, manganese of metallurgical quality. In 1970, the latest year for which Department of Interior figures are available for all four metals cited, the United States imported, at a cost of $66 million, 85.7 per cent of all the grades of manganese it con- sumed. Nickel?a necessary alloy en the production of stainless steel Large amounts are required for a variety of high temperature and elec- trical resistance alloys and smaller amounts for such items as coins and nickel cadmium batteries. In 1970 the United States imported 100 per cent of its high-grade nickel con- sumption, mostly from Canada, at a cost of $426.5 million. Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 eline 17, 1974 Approved For Release 2001/09/07 : CIA-RDP751300380R000500410007-9 CONGRESSIONAL RECORD ?SENATE S 107Q Copper?second only to iron in the amount and vazipty of its uSes. The United States produces the vast bulk of fts re4u1,,reinerkts. The problem here is the approaching exhaustion of high grade U.S'. ores. In 1070 the 'United States imported 6 per cent of its Primary consumption, at a cost of $71 04.)balt--most important for the manufac- ture of permanent magnets. Without it there wain& be no modern communications sys- tems. /t is also used in guided missiles, jet aircraft engines, gas turbines and high speed tool steels. Cobalt ores, for which no substi- tute has been found, are produced princi- pally in Zaire, Zambia and Morocco. In 1970 the United States imported 92 per cent of its cobalt needs, at a cost of $26.5 million. A BILLION FOR ratrti It seems fair to assume that, with the de- valuation of the dollar (coming back up again, however) and the steady increases in consumption which have occurred, the cost for imports of these four metals alone may be well over a billion dollars lb 1974?not a large bite of the H.S. national budget per- haps, but a sizable factor in the balance of payments. As the energy crisis should have taught decisionmakers, the important thing is not only the cost but the Tact that U.S. na- tional security and the welfare of the Ameri- can people require absolute assurance of an uninterrupted source of supply of raw ma- terials essential to the economy. It is reassuring to realize, therefore, that unlimited quantities of the four minerals here singled out are available to American miners within three to four mires of cheap and efficient transportation. The location is at the bottom of the oecan, the transporta- tion is by ship, and the three to four miles is straight down. All four metals, together with minor or trace amounts of some 25 others, are found in the manganese nodules that strew the bot- tom of every ocean and even such large freshwater bodies as the Great Lakes. The average nodule is one to three inches thick. The best commercial specimens lie in great carpets on the Pacific floor in a wide band running south of Hawaii from mid-ocean to near the southern California coast. Credit for discovery of the nodules belongs to the scientists who made the historic globe- girdling three-year oceanographic voyage of the converted British corvette HMS Chal- lenger in the 1870s. These first specimens of the world's greatest treasure were tucked away in the British Museum and for a time forgotten. About the size and color of an over-done meatball, they were easy to forget. And, since they are found at depths of 12,000 to 20,00 feet, they could not then have been reclaimed in quantity, even if they had been blue-white diamonds. There are several theories explaining the origin of the nodules. A favorite one suggests that metallic elements in sea water form around any small nucleus, perhaps a bit of sea shell, much as the pearl in an oyster shapes itself around a grain of sand. Man- ganese nodules are half buried in the mud, and coverage of the bottom in the huge area of known major deposits ranges from zero to 50 percent. A workable mine site would average 30 to 35 percent coverage, with a concentration of about two pounds per sqnare foot. Educated guesses place the quantity in the Pacific alone at somewhere between one and two trillion tons. The growth rate is estimated at 15 million tons a year, making the lode the only perpetually self-renewing treasure since Aladdin lost his lamp. Mineable nodules are 35 percent or more manganese, from 1 to 1.6 percent nickel, .75 to 1.5 percent copper, .2 to .3 percent cobalt and .05 percent molybdenum. SCOOPING UP THE MEATBALLS Getting the nodules to the surface and into the holds of a mother ship is an awe- some engineering feat. And there is no precedent in land mining operations for the problems involved in processing the raw nodules in which the recoverable minerals are distributed atom by atom throughout the ore. Some ten years of quiet but expen- sive experimentation by several companies and syndicates appear to have resulted in workable solutions to the engineering problems. American companies favor some type of vacuum dredging, for the most part. In the continuous-path method a dredge head suspended by a conduit from the ship is swept back and forth over the mine site, Sucking up nodules as it goes. Fixed-area dredging involves a collecting device, such as a sunken barge, which remains stationary until the ore lying within its sweeping radius has been collected. The second method, a Japanese invention, employs an endless rope to which dredging buckets are attached at intervals. The ship moves sidewise as the revolving loop of dredge buckets is dragged across the bottom, scooping up the ore. By whatever method, the prospecting phase alone can cost from samo to $4,000 a day, and considerably more for full production operations. Several carefully unpublicized methods for winnowing the metals also have been tested. AU successful ones are believed to involve hydrometallurgical techniques with sufficient flexibility to accommodate the varying character of the ore. Most authorities agree that the United States has a technological lead both in the systems developed for nodule retrieval at great depths and in the metallurgical proc- esses for reclaiming the ores. This lead, say spokesmen for the American companies in- volved, is a fragile one, however, and will be lost to aggressive foreign competition if not promptly pursued. Japanese, West German, and French interests are the most advanced competitors. Russian capabilities, as usual, are not fully known. A dozen American companies have already shown enough interest to invest substantial research effort and seed money. There are three leaders: (1) Deepsea Ventures, a sub- sidiary of the Tenneco conglomerate, is be- lieved to have invested well over $10 million in sea mining programs since a go-ahead decision in 1988?following years of earlier investigative work. The DV ship Prospector has sampled a number of potential mine sites in the Pacific and in the course of more than 30 cruises has brought back tons of nodules to the company's pilot processing plant at Gloucester Point, Va. (2) The Ken- necott Copper Corporation has logged the recovery of samples from more than 3,000 Pacific sites and brought back some 250 tons for experimental processing in the company's San Diego laboratory. (3) The Summa Cor- poration, solely owned by billionaire Howard Hughes, has an estimated $80 million already invested and another $200 million committed to a system designed to sweep up 5,000 tons of nodules a day. The company is ready to commence operations with the 36,000-ton Hughes Glomar Explorer, built to order by the Sun Shipbuilding and Dry Dock Co. The sophisticated Hughes system includes a 324- foot submersible barge designed to carry a huge dredge head to the ocean bottom to scoop up nodules and send them by com- pressed air up a 16-inch pipe to the ship. Nothing is known of the company's proc- essing facilities. Leigh S. Rattner, Director Tor Ocean Re- sources, Department of the Interior, makes some assumptions and predictions which indicate the important role ocean mining can be expected to play in the metals market. Taking 1975 as a target year, he assumes that mineral content of the nodules is ap- proximately as estimated in the above (in- dustry) figures, that there would be two companies processing three million tons per year and one company processing one million tons per year. He further assumes that all would be extracting close to 100 percent of the reclaimable metals. Nickel production, which he regards as the key factor, would then fill 4.8 percent of U.S. primary nickel demand and amount to 53 percent of pro- jected imports. Manganese from the sea would fill 12 percent of both demand and imports. Copper would come to 3 percent of estimated demand; 41 percent of imports. The sea-produced by-product of cobalt, if all of it were extracted, would be signifi- cantly in excess of both demand and imports. DON'T HOLD YOUR BREATH Ratiner, who speaks authoritatively for the executive branch of the government, adds, significantly, that 1975 is not the date to expect deep sea mining of such magnitude to occur. What, then, is the date? Soon? Ever? The nodules lie deep on a near lifeless (and therefore incorruptible) sea bed far outside the widest and wildest claims of territorial jurisdiction?even beyond the reach of the Geneva Convention rules for exploitation of the continental shelf. Since U.S. firms know where the market- able nodules are and have a pretty good handle on the technology required to retrieve and process them, what are they waiting for? They are waiting, say the impatient miners, for the 'United States government to spell out protective guidelines enarpling them to s"?:e out claims large enough and for a tenure long enough to make possible a fair return on the huge investment required. But the United States government, says the more patient State Department, is itself waiting for a set of internationally accepta- ble guidelines, preferably under the aagis of the United Nations. Which brings up the U.N.'s "Law of the Sea Conference" scheduled for this summer in Caracas, Venezuela. There the collision courses of the "have" and "have not" nations will converge, and they will hopefully ham- mer out the framework, at least, for the first truly global code of sea law since Hugo Gro- tius, the 17th century Dutch lawyer, fabri- cated the historic legal brief which led to the "cannon-shot" rule for territorial waters and the philosophic-legal concept of Mare Libe- rurn, or Freedom of the Seas. COUNTDOWN TO CARACAS Also on the agenda at Caracas, in addition to exploration of sea bed minerals, are use of the sea bed for active and passive military purposes, world fishing rights, limitations on air overflights, commercial shipping, naval operations, oceanographic research, marine pollution and the jurisdiction of coastal states over adjacent waters. Probably the best that can be hoped for in any of these numerous controversial areas is an all-nation agreement or a series of area agreements equally distasteful to all concerned. There are few matters in which amicable agreement will come easy, if at all. The highly charged question of coastal state jurisdiction over adjacent waters provides possibly the best example. Various national positions range from the tenacious U.S. stand for the traditional three-mile limit to the insistence by Latin American states fronting the Pacific on a 200-mile limit that the conference provide them economically important fishing mo- nopolies in offshore currents. There is more involved, here than fish, of course. Most states now appear to favor, and many insist on, a twelve-mile territorial zone. But even that small increase would bar free access, via Gibraltar, to the Mediter- Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 S A0702 ee Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 CONGRESSIONAL RECORD ?SENATE June 17, 1971 ranean for the United States and to the Atlantic for Russia. And Japan would lose actress through the straits of Malacca, vital to her filet iMpOrts, from the Persian Gulf. Many other important straits Woula be affected. zs is no secret that the United is prepared, however, to accept extension of territorial limits out to 12 miler', provided there are specific exemptions Made to guar- antee continual rights of free passage through narrow waterways of strategic Im- portance to MS. military security and vital commercial interests. The United States Will probably also agree to even broader "layered" zones in which coastal states would. exercise varying degrees of control over fishing, mining, pollution, exploration and treasure hunting?but would not have the right to impede unrestricted passage by ship. It is conceivable, then, that the High Seas with all of its traditional free- doms for just about everything snort of pi- racy will inerve from three miles out to 200 miles from the continental shores. SEA BED WAR IN CONGRESS American miners are concerned aboue how their interests will fare in the trade-off:; that probably will have to take piece hi the smoke-filled committee roe= at Caracas if agreements are to be reached. To strengthen their own bargaining position, and as a hedge against possible prolonged postponement or outright failure of the Caracas Conference, the influential American Mining Congress is pushing a legislative program of its own in the form of two identical bills: H.R. 9? sponsored In the House by Represenoteive Thornas N. Downing (D-Va.), chairman of the House Oceanographic Subcommittee? and S. 1184--introduced for consideration in the Senate by Senator Lee Metcalf (D-Mont.) Chairman of the Subcommittee on Minerals, Materials and Fuels. The Dorn/Metcalf legislation would au- thorize the Secretary of the Inter or to issue exclusive licenses to American citizens and corporations to stripteine the ocean floor for hard metals in blocked-out areas as largo as 40,000 square kilometers (about the KEG of West Virginia, but to be reduced by 75 per cent for actual commercial operations:, and to conduct in-depth mining in much smaller areas. Claims sponsored by "reciprocating states" with comparable legislation would also be recognized. To maintain his claim a licensee worild be required to invest substantial development funds on an ascending scale, to maintain continuous commercial recovery once started, to protect the integrity of his working envi- ronment, to avoid interference with other ocean users, and to agree to arbitration of disputes. The licensee's investrnent wotld. be protected by government-administered but miner-financed insurance against outside in- terference and miners would be reimbursed by the government for any loss due to neer- national regulations agreed to by the United States which would be less favorable than the rights granted under the law. There have been extensive hearings on the bills by both committees. Senator Metcalf, a former judge who believes in hearing all sides of a case, has taken exhaustive testimony from miner's, scientists, environmentalists, State and Interior Department ?Melia, and spokesmen for that potent new force in Amer- Man, life,' groups of "Concerned: Citizens." Congressinan Bob Wilson of ann Diego, a. leading legislative authority on oceenog- raphy, is also sponsoring legislation aimed at promoting an immediate climate favorable to deep sea mining on a commercial scale. Such informed authorities as Ambassador John R. Stevenson, special representative of the President for the Law of the Sea Con- ference, and Charles N. Brower, Acting Chair- man of the Inter-Agency Task Force on the Law of the Sea, believe the United States is Morally bound to foreign unilateral legiela- tion as long as there is a reasonable expecta- tion of a "timely and successful" interna- tional agreement, "Timely and successful" means agreed-upon rules no later than sum- mer 1975. They emphasized in their testi- mony that the United States continues to adhere to President Nixon's position that it is neither necessary nor desirable to halt ex- ploration and exploitation of the sea beds during the negotieting process, provided such activities are subject to the interna- tional rules to be agreed upon, which rules should include due protection of the integ- rity of investment made in the interim period. Less temperate testimony from private groups has characterized the proposed legis- lation as a miner's land grab which would -create a new arena for clashing jurisdictions out of the last truly international area on earth. The most vociferous opponents of inde- pendent national or private industry initia- tives are the members, perhaps 75 or more, or an informal bloc of developing nations in Asia, Africa end South America who favor an all-powerful. international authority to direct all deep sea mining and apportion the income derived from it. This bloc has rallied under a banner which proclaims the deep sea as "the common heritage of mankind." This handsome piece of rhetoric is certain to haunt the halls and resound from the ros- trums at Caracas. Meanwhile, the miners wait, spending addi- Monet sums for exploration and experimenta- tion until they can secure the protection, national or international, they must have to induce bankers and private investors to help provide the capital?as much as $250 million for a one-unit operation?to go into commercial production. Some, with little faith in the Law of 'the Sea Conference, pri- vately express the hope that the enigmatic billionaire, seemingly independent of outside capital and restraints, will press straight on and that international law will then take shape around a fait accompli as it so often has in the past. Most miners as well as many legislators and leading oceanographers simply hope for reasonably prompt action, national or inter- national, that will make It possible to put U.S. technology to work on a commercially significant scale. They believe that a law could be enacted by Congress flexible enough to provide the necessary security for Invest- ment capital now and to be fitted into any all-nations agreement that might come later,. If a mineral (earls as serious as the energy crisis already hare is to be avoided, say pro- ponents of the current legislation, there can be neither weakness a will nor meanness of spirit. The United States can afford to be generous in cooperation with any interna- tional sea-mining body of the future, because there are minerals enough in the ocean for all. What the country cannot afford is to lot the opportunity to secure its own future slip away. If responsible private industry gets the regulated backing it needle metals from the deep sea bed will follow the fishing and un- derwater oil industries as the third great simmer of ocean wealth, and may some day, hi fact, become number one. Mr. FANNIN. Mr. President, members of the Senate Interior Committee have been following the efforts conducted by the U.N. Seabed Committee leading up to the Caracas conference.. We have ap- proached this subject in a purely bipar- tisan mariner by making our views known to the administration on the is- sues relevant to our committee's juris- diction. As part of this effort we have most recently transmitted to the Secre- tary of State a letter reflecting the views or this committee on two important is- sues that will be considered by the con- ferees at the Caracas meeting. One re- lates to the seward limits of the Conti- nental Shelf and the other pertains to the regime for mining the deep ocean floor beyond the limits of the Continental Shelf. These views are definitively set forth in the letter which I ask unani- mous consent be printed in the REmailD at this point. There being no objection, the letter was ordered to be printed in the RECORD, as follows: U.S. SENATE, Come risme ON INTERIOR AND INSULAR AFFAIRS, Washington, D.(7, June 7, 1974. Hon. HENRY A. KISSINGER, Secretary of State, Washington, D.C. DEAR MR. SECRETARY: As you know, con- ference will convene in Caracas on June 20th to attempt to negotiate a treaty or treaties resolving international problems affecting the law of the sea. The Senate Committee on Interior and In- sular Affairs has been following these nego- tiations closely since the inception of the United Nations Seabed Committee in 1967. Since that time, on a continuing bipartisan basis, members have participated in a special subcommittee chaired by Senator Metcalf. They have sent representatives to nearly every session of the United Nations Seabed Committee. Additionally, the Committee has held several hearings related both to pro- posed ocean mining legielation and to de- velopments which have taken place at the various preparatory sessions conducted by the Seabed Committee. We have also met with the United States delegation to the Seabed Committee, usually prior to depar- true and subsequent to its return from these sessions. Although several issuee will be considered at the Caracas conference, this Committee has confined its attention principally to matters affecting the development of min- eral and fuel resources. Our principal con- cern has been directed to the following two Issues: The limits of coastal state jurisdiction over resources of the, seabed adjacent to and beyond the territorial eye and the nature and the limitations of coastal state jurisdic- tion and authority in such areas. The rights of individual countries and their nationals to explore and develop the natural resources of the seabed beyond the limits of national jurisdiction, the rules and conditions and institutions which might govern such exploration and development, and the distribution of benefits resulting therefrom, Members of the Committee have frequently made known their views about the policies the United States should adopt regarding each of these issues. With regard to the former, members of the special subcommit- tee, in their report of December 21, 1970, expressed the following conclusion: . . . we adopt the view of the American Branch of the International Law Association regarding the seaward limits of the Con- tinental Shelf. That position is not only consistent with the wisest of policy prefer- ences, but more importantly soundly inter- prets the present law. It holds that "rights under the 1958 Geneva Convention on the Continental Shelf extend to the limit of ex- ploitability existing at any given time within an ultimate limit of adjacency which would encompass the entire continental margin." We interpret the meaning of the term "continental margin" to include the con- tinental shell', slope and rise. We understand that a growing number of countries support the principle that coastal state jurisdiction over natural :resources of the seabed adjacent to its coast should be limited to that area Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 Approved For Release 2001/09/07 : CIA-RDP751300380R000500410007-9 Ane 17, 1974 CONGRESSIONAL RECORD -- UNATE contained within that part of the seabed which is bounded by .a line parallel to and 200 miles tilitarit,from the base line from Which the territorial sea ,is measured. We undetstand t4at_. ,sonie executive branch agencies there is support for such a petition. We wOnki JUs to state our strong preference for the view which would allocate to coastal itatesrareas of the seabed adjacent to their Oasts, which extend seaward 200 Miles and, in ,addition; all portions of the ContinentaApiargin which extend beyond 200 Miles. We ,have present rights under inter- natiohal law to this area. As you know, there are several areas of ? the United States continental margin which extend beyond 200 miles. Because of the na- tion's critical energy problems, including our increasing dependence on imported oil, the United States should not forfeit any portion of the continental margin which could be utilized for mineral production, and more particularly, for production of oil and gas. The United States has rights to all natural resonrces-of our continental margin, no mat- ter how far seawardly it extends. We should not jeopardize these rights at Caracas. - Regarding the issue of the regime for the deep seabed, various options have been con- sidered in preparing for the Law of the Sea Conference. Many developing nations have expressed a preference for the establishment of an international seabed mining organiza- tion, frequently referred to as "The Enter- prise." It Would have exclusive authority to explore and develop the resources of the seabed beyond the limits of exclusive coastal state jurisdiction. Through control of "The Enterprise," the developing countries could deny effective commercial access by the technologically advanced states to the natural resources of the seabed lying beyond the. limits of. exclusive coastal state juris- diction. Many developed nations, including the United States, have favored preserving as best they can the existing high seas freedom in- cluding, but not .limited to, the freedom to conduct sicentific research, on the high seas and to mine the minerals of the ocean floor beyond the limits of exclusive coastal state jurisdiction. These nations have not opposed the creation of an international organiza- tion to administer ;the exploration and de- velopment of seabed resources lying beyond th,e jinalts of exclusive coastal State juris- diction, but they hav_e indicated the prefer- ence that such an international organization neither Conduct such exploration and de- velopment Of the mineral resources of the deep ocean floor, nor control production thereof. They have tended to take the view that we should neither restrict opportuni- ties for exploration and development of the deep ocean floor by developing countries, nor object to paying a portion of the value of the mineral production on the ocean floor to an international organization, for the use and benefit of developing countries. Also they have continually expressed a preference for some Sort of equitable licensing system which an international organization would have the authority to administer on a ministerial, rather than,discretionary, basis. In other WOKS, once an applicant state met the rele- vant Standards, it would automatically be eligible to receive a license from the inter- national authority. The principal commodity to be mined on the deep ocean floor would be manganese nodules which are rich in copper, nickel, co- balt and manganese. There is a growing re- luctance of mineral exporting countries to Make these minerals available to the United States on a secure and continuing basis. Our heavy dependence on imports of such min- erals places us in a vulnerable position. Specifically, the United States dependency on imports of such minerals is as follows: manganese, 9'7%; nickel, 74%; cobalt 88%; and copper, 1807 it is vital to the national interest that the United States companies retain their cur- rent right of access to mine nodules lying on the deep seabed under terms and conditions conducive to =king the investments neces- sary for their development. We believe this objective should be vigorously pursued at Caracas. The Committee will follow the proceedings at Caracas with great interest, and will look forward to meeting with the members of the delegation upon their return. Sincerely yours, HENRY M. JACKSON, ALAN BIBLE, PAUL FANNIN, CLIFFORD P. HANSEN, JAMES L. BUCKLEY, JAMES A. MCCLURE, DEWEY F. BARTLETT, U.S. Senators, THE PRIVATE SECTOR WASTES MONEY TO JUST LOOK Mr, PROXMME Mr. President, the waste in the Federal Government has been denounced broadly in the Congress and out and it should be. As one of the principle denunciators I not only plead guilty but promise to keep it up, when- ever possible. Still the fact remains?not only that the great majority of workers in the Federal Government work hard and con- scientiously, but there is also consider- able waste in the private sector and in some respects it is even worse. 'As a prime example of this I am in- debted to Joe Cappo of the Chicago Daily News who has just honed his type- writer in on a beaut. Mr. Cappo quotes from a press release from the Cole Division of Litton Indus tries, and just listen: A group of secretarial students will att d a one-day seminar to learn the skills of b ing "executive coffee" for their futur m- ployers. The executive coffee-brewing emi- nar will include several coffee making cipes, a primer on how to attractively set a sk for coffee drinking, and a list of snack at are advisable for consuming with coff at vari- ous times of the office day. Mr. President, can you agine the fury with which this kin f seminar would be greeted if it were ;nducted for government secretaries d properly so. As Mr. Coppo asks, w could they not offer a muse in back bbing, or shoe polishing or runnin ut and getting a pack of cigarettes. Mr. President t fact that the Cole Co., that is puttin n this extravaganza is a subsidiary o he Litton Industries, does not surpris Senator. No wonder Litton is pus Lockheed and Grum- man for the ord in cost over-runs on defense con Is. Litton may not be able to build a ip that will float, but I bet they brew mean cup of coffee. Mr. P ident, I ask unanimous con- sent t the column by Joe Cappo be printe in the RECORD. e being no objection, the column was rdered to be printed in the RECORD, as lows: S 1003 It doesn't have anything?to do th marketing or advertising or any of the ther subjects I normally cover. But it is t type of item I hate to pass over without haring with you. I will quote from a press relea sent to this newspaper by the Cole Divisio of Litton Industries, which makes office f rnishings: "A group of secretarial student/ will attend a one-day seminare skills of brewing 'executive coffee' for,. their future employers... (the students a attend North- western Business College, w h has no con- nection with Northwester ? niversity. The seminar will be at 10:30 m. Tuesday at Space 1147 of the Merch'disc Mart.) "'Coffee for American' xecutives ?at their desks has become an ac pted way of corpo- rate life,' states Richer ierney, Cole's presi- dent. He notes that E pean secretaries have been brewing coffe and tea?and some- times even makin? unch for their bosses for more than 100 y rs. "'Today's exec ye secretary is not just part of the all urniture like typewriters or filing cabine ,' adds the Cole president. 'She acts as r employer's office hostess making sure t t he and visitors to his office are comforts e and presented with accept- able ameniti ' "The exec lye coffee-brewing seminar will Include se ral coffee making recipes, a primer on ow to attractively set a desk for coffee driIkIng,. and a list of snacks that are advisable! or consuming with coffee at vari- ous tim of the office day. . . ." I thh this company is doing a good thing fbr alVof executive-hood. I mean, what is wors han having a secretary who can't brew a dentcup of coffee? e problem with the Cole division of L' on Industries is that it is dull, unimagi- tive and old hat. Women ... excuse me... rls already have Mrs. Olson to tell them how o make good coffee for The Man in Their Lives. What this company should have done is offered a complete set of courses, not just a measly one-day seminar. For example today's secretaries, with all that college training, don't rub executives' backs as well as they used to. Cole could easily offer a one-day seminar in Back Rub- bing. How about a course in Shoe Polish? Or one In Running Out and Getting a Pack of Cigarets? "I'll bet our women readers have a lot of suggestions like this for the Cole Division of Litton Industries. They can mail them to the company's local office, Space 1147, Mer- chandise Mart, Chicago 60654. And send me a copy at The Daily News, Chicago 60611. FOOD: A RACE AGAINST THE CLOCK Mr. KENNEDY. Mr. President, as world food resources diminish and the search for food becomes more acute among developing states, many nations will come to increasingly rely upon the international community?particu- larly the United States?to help meet a major portion of their food require- ments. The world-wide cost of food grains is not only growing prohibitively high for hungry nations, but in order to meet this burden, foreign exchange re- serves are being diverted from essential development programs to purchase food. A food deficit spiral" is slowly be- ginning to drain both the resources and W EN?ER?GIRLS, KEEP THAT MAN HAPPY I energies of developing states?affecting (By Joe Cappo) not only the economic viability of al- I think there might be some women in the ready improverished countries but the udience who will Squirm little a e as they read very foundations of their institutions as In light of this dependency, we feel that this column. well. M the price of food begins to exceed Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 Approved For Release 2001/09/07 : CIA-RDP75600380R000500410007-9 S 10704 , CONGRESSIONAL RECORD ? SENATE :Tune 17, 197: d sent sources through more World are less hopeful now than they were effective production practicei. lest fall. Most developing countries will be There are, of course, multinational corpo- especially short of foreign exchange reserves rations doing these things now, especially in their ability to Pay, the United States can take little satisfaction from title short- term harVeft of dollars it is reaping from internatio food purchases. Mr. rresid t, one of the greatest con- tributions w we as a people have made to develo nations has been our commitment to II support their efforts to reach economic if-sufficiency Yet, this critical nom= aid is now likely to be diverted, to b American food rather , than to forge onoinic: inde- pendence with American p. If we are to stop this food deficit sp if we are to help ensure the success of foreign assistance, then our Govern t must begin to recognize the impendin world food crisis and assist in the plann a coherent international food polio Our Nation will be a crucial force the forthcoming World Food Conferenc which will be held this November in Rome. The current optimistic forecasts for better world food yields this year can not only buy the international com- munity additional time in the immedi- ate days ahead to plan food policies, but will also enable the United States to pre- sent a viable program as an alternative to a deteriorating minimum World fool security in an atmosphere of mutual co- operation rather then mutual suspicio. Mr. President, I would like to draw to the attention of Senators three arti- cles appearing in the New York Times and the Baltimore Sun, and I ask unan- imous consent that they be printed in the REcoan. There being no objection, the articles were ordered to he Printed in the REC- ORD, as follows: [From the New tork Times, June 16, 19741 A RACE AGAINST TELE CLOCK ON FOOD (By Roger E. Anderson) The world toed problem we are s) Ware of today shares with moat ether so- called crises a curious duality: it was. at once foreseeable and foreseen but still un- recognizable until the last minute. Ever since Thornart 'Malthus proposed. in 1798 that people might someday multiply themselves out of food, the idea has been hovering ?agilely in our oonscidusness. For some, the reality has been deadly epprixert. A Malthus:Ian moderate, which many food experts seem to have become, would note dispassionately that the problem ins tnree dimensions?time, population, and produc- tion. With world population growing at an an- nual rate of 2 per cient, we have perhaps 20 years, or roughly until the year 2000, to control population greirth or to raise -food production to stiftioletit levels around the wand so that all people can afford to eat, or beth. After that, unless the situation has been remedied, the lid blows off the pressure ceeetetetelnn. ferecetters are prepared' even toIMagine the tonsequences if that should The short-term leu4doek is not encouraging, and it 'Servos to den* with grim preci sten the nature of the long-range problems at. eed. The current smelt), of major agricultural commodities and the large draw-down of world food reserves menace the poorest and slowest-growing countries most seriously. The developing nations may have to pay some ialfi WM= more for essehtlid imports in 1974 than they did in 1973. They are so gravely threatened by increasing food and fertilizer prices and almost intolerably high en prices that the prospect or disaster with- in the next Wend years is real, arid we May Food production prospects for the Third an improve pre as a result of the increase in energy prices the fields of food growing and processing, last December, sled shortages of imported commercial fishing and fish meal production, energy, fertilizers, pesticides and other agri- farm machinery, pharmaceuticals and others. cultural inputs consequently will be s,ggra- There is ample room for more, vated. The higher :prices they will receive for The developing nations have limited re- their own relatively small commodity ex- sources. Their economies show diverse pat- ports will not significantly offset their higher terns but they share a common ability to import costs, frustrate private enterprise. Some seem to Important parts of the world are, in fact, prefer outright aid because of their reluc- approaching the precarious line between sur- tance to deal with private, profit-making in- vival and disaster. To take India as an ex- terests. This ignores the fairly-well deco- ample, if?on top of all its other burdens? mented claim that one dollar of private in- it were to suffer a monsoon failure, the con- vestment in technology is more effective than sequence could be a famine in which literally three dollars in outright aid millions of lives would be lost. The shock of those deaths would rattle social, political and economic windows around the world. In any discussion of world food problems the question. of -reserves invariably arises. It is widely expected that the outlines of me form of global food reserve system will erge from the United Nations World Food erence to be held in Rome this No- And It is of special significance that such system supposedly will be accom- panied plans for an international effort to lucre food production in the develop- ing count When the ord reserves is mentioned heads immediately im in ,the direction of the United States, 7 two decades the world's principal reposi v of grain stocks and bal- ance wheel of f [min These stocks have now been largely d cited. The present posi- tion, as expressed by tare, of Agriculture Earl. L. Butz and m rs of his depart- ment, seems to be the e United States is not opposed to the buil e of reserves and will cooperate in such an ort with other nations. The United States cannot, h ver, accept the complete responsibility carrying these reserves. That reeponsibilit a global one, to be shared by other nation includ- ing the developing ones. Moreover, in the long run people ot continue to be fed from reserves. Food ust come essentially from annual produc and. the immediate and long-range eh lenge, therefore, :Ls to plan to produce instead of planning to store it. Logic and intuition alike tell us that the ultimate solution to the food problem lies In production and development?and they go hand in hand. International efforts, such as provided by the World Bank and the Agency for Inter- national Development, need to be increased to assist agricultural development in the de- veloping nations. Many of these have exten- sive but untested agricultural potentials. The countries where "green revolution" prac- tices have been applied have shown that meaningful increases in food production are possible there at substantially rower costs thin for comparable increases in some of the more agriculturally advanced nations. Ultimately, I believe, agriculture in the emerging nations will have to become more an industry and leis 'a personal way of life. In the process it will have to develop along lines that will allow it to regenerate its own capital through profits. Initially, however, it will require seed capital, which could be pro- vieed by national governments, international oreanizations, bilateral arrangements with the United States or multinational com- panies and financial institutions. Last March, speaking to a group or buei- ne:ismen and Government officials in Tokyo, ,uggested that the multinational agricul- tural corporation could be an effective ve- hicle for infusing capital into the now labor- inteneive farming systems of developing na- tions, forprograms transrihlttllhgleading to the development of technical and farm man- agement skills and for marshalling local in- To be as realistic as possille, private enter- prise faces a number of possible hazards in doing business in these countries: currency devaluation, restraints on the repatriation of profits, expropriation, revolution and, lately, kidnapping. These are sobering risks, but risk is private enterprise's middle name. In many cases where it hes been done suc- cessfully the key to entry into the opera- tion in developing nations has been the joint-venture approach, win re the host coun- try has substantial participation in the enter- prise. Several combinations are possible. A government may want to process the raw materials its land can produce but must import the technology to ilo so. Private capital may be introduced into a nation that will provide its iewn public funds for the building of port facilities, roads and infrastructures. A government may agree to provide labor and materials in exchange for private capi- tal. and management. Methods of payments differ, sometimes taking the form of long-range contracts by which the company can buy the host coun- try's products at fixed prices. It is likely that ventures of this kind will increase as developing nations become more convinced that they offer greater benefits, with fewer springs attached, than other varieties of assistance. It has been docu- mented, for instance, that in one country nationally owned and managed fertilizer plants .consistently average only about 60 r cent of efficiency, a rate that is not ective and certainly not profitable. When United States multinational corporation en ed the picture, a typical plant was.. bro t up to about 85 per cent of capacity in a tively short time. If t. multinational company is going to make t contribution that it can toward easing or lying the food shortage problem, it will, in e nature of things, keep an eye OIL its proft and growth in sales?but not exclusively. I 111 also have to show increas- ing concern its 'positive effects on the totality of the h country and demonstrate its social and fi a ial accountability. The company w have to give evidence that it is providing e I,ost country with contributions toward increase in efficiency of local enterprise, the Tarn flow of capi- tal and technology, emp ment growth, the national ability to. comp in the world, balance-of-payments impr ment and tax revenues. The food crisis for the deve'lag nations is real and it is dire. It has t potential to become disastrous, but we h that it will not?and business shares an igation with other sectors of society to work ? pre- vent that eventuality. One encouraging sign we might loo o would be the emergence of a strong?perh collective?initiative by these struggli countries by actively -seek from the business community some forms of productive, devel- opmental participation that would be at least tolerable within their societies. They might be astonished by the quantity and quality of the response and by the results of that governments cAltrffolifeerditrkibleagW200i7011157: tvitikbPAERIMOR n00410007-9 see gover . ? I I