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December 12, 1974
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Approved For Release 2005/06/16 CIA-RDP79-00957A000100020017-0 December j2, 197 CONGRESSIONAL RECORD - SENATE the aisle. The first amendment would provide- The PRESIDING OFFICER. May the Chair inquire of the Senator? Does he ask unanimous consent- Mr. ROBERT C. BYRD. That they be considered en bloc. Mr. President, I withdraw my request. Mr. LONG. Mr., President, I would be willing to withdraw my amendment so that the. Senator could off er his. _ I withdraw my amendment tempo- rarily. Mr. ROBERT C. BYRD. But Senator HARTKE has the right to the 'floor. He has unanimous consent that he retain the right to the floor. If the Senator withdraws his amendment, he has the floor and the Senator's amendment is not in. Mr. President, I withdraw my amend- ments. Just forget about it. Mr. LONG. Then I leave my amend- ment as the pending business. Mr. ROBERT C. BYRD. 'Mr. Presi- dent, I ask that my two amendments be printed and that they meet the reading requirement under rule XXII. The PRESIDING OFFICER. Without objection, it is so ordered. Senator LoNG's amendment is still pending. Mr. LONG. In view of the fact that this might present a parliamentary problem- The PRESIDING OFFICER. The Chair understood that the Senator re- President. - The PRESIDING OFFICER, Very well. FOREIGN ASSISTANCE ACT OF 1974 Mr.. ROBERT C. BYRD. Mr. President, on behalf of Mr. FUiBRIGHT I ask the Chair to lay before the Senate a mes- sage from the House of Representatives on S. 3394. The PRESIDING OFFICER (Mr. HELMS) laid. before the Senate a message from the House of Representatives in- sisting upon its amendment to the bill (S. 3394) to amend the Foreign Assist- ance Act of 1961,, and for other purposes, and requesting a conference with the Senate on the disagreeing votes of the two Houses thereon. Mr. ROBERT C. BYRD. I move that the Senate agree to the request of the House for a conference on the disagree- ing votes of the two Houses thereon, and that the Chair be authorized to appoint the conferees on the part of the Senate. The, motion was agreed to; and the Presiding Officer appointed Mr. FZJL- BRIGHT, Mr: SPARKMAN, Mr. CHURCH, Mr. SYMINGTON, Mr. HUMPHREY, Mr. AIKEN, Mr. CASE, and Mr. JAVITS conferees on the part of the Senate. TRADE REFORM ACT OF 1974 The $eite continued with the con- Ideratipn. of the bill (H.R. 10710) to zl,o>'idlsgriminatory, an air world eco- n0#nic,sys em, to stimulate the economic growth of the United States, and for other purposes. 521283 d Europe and Japan. The European Coxn- Mr. . HAnTKE. Mr. President, since World Wa changed markedly haII, So has America's position in the world. These changes: must be reflected in our Foreign Trade Policy. The assumptions of American trade policy after World War II were that America must give blood to restore a bleeding world; and that to do so was in our long-range intere$t-both economic- ally and politically. Because we did not wish to see com- munism take over the chaotic economies of Europe and Japan after World War II, and out of a sense of simple human- ity, we decided to give generously to re- store those ailing nations. We gave funds; we gave technologies; and we threw our markets open to the products of these other nations. Our immediate objective was to fortify these endangered countries against communism. Our long- range expectation was that these, and other nations, upon recovery would be-. come good customers for America. We were able to pursue this policy with minimal pain to our own people. The war had wrecked the productive plant of many nations. The United States nomi- nated world manufacture easily. Much of the money we gave away came back to us in the form of purchases of American machinery and commodities. By the 1960's, however, our role had changed-not because we consciously altered our cqurse but because of a changed world situation. Europe and Japan were no longer weak and bleeding economies about to collapse. The Com- mon Market was on its own; and Japan was reaching well beyond its own. What is more, both the Common Market and Japan viewed themselves as America's prime competitors. While continuing to count on America's market as an outlet, they made it increasingly difficult for America to get into their markets. Mr. President, certain portions of the Finance Committee report on the trade bill very accurately describe the changes in the United States and world econ- omies since 1960. I should like to quote extensively from those sections. The re- port states: During the early 1960's the U.S. economy Itself moved from stagnation to respectable growth without significant inflation. Begin- ning in 1965 an inflationary trend developed which has grown progressively worse. In- flation in the United States has now reached a level unprecedented in peacetime.. . . Endemic inflation led to extraordinary bal- ance of trade . and payments deficits be- tween 1970 and 1972 which in turn created aasosive run against the dollar. After the U. culd no longer maintain a fixed parity b een the dollar and gold, the fixed ex- s in the economy, creating shortages of materials and leading to the imposition ve advantage (e.g., soybeans). As the U.S. economy underwent significant internal changes during the 1960's and early 1970's, the U.S. economic pre-eminence in the world economy declined relative to western munity, born in 1958 in the Treaty of Rome, has become the world's largest trading bloc, with exports and imports now exceeding three hundred billion dollars. The com- munity's share of world GNP, world trade and world reserve assets has grown mark- edly since the 1960's, and this trend has ac- celerated in the 1970's. The growth of the Japanese economy has outstripped even that of the European com- munity. Real growth in Japan grew at the phenomenal rate of 10.5 percent a year for the period of 1960 through 1972, as compared with 5.0 percent in Italy, 4.5 percent in West Germany, 4.1 percent in the United States, and 2.7 percent in the United Kingdom. By almost every economic indicator of growth Japan has been the world leader. In terms of military or tax burdens, however, Japan is at the bottom of the list. The Achilles Heel of the Japanese economy-the overwhelming dependence of Japan on foreign oil-has interrupted Japan's record of remarkable economic growth. Less-developed countries (LDC's) as a whole progressed fairly well during the 1960's in terms of their economic growth and their balances of trade and payments performance. Between 1960 and 1972, real economic growth in the LDC's averaged over the 5 percent goal set for the 'decade of development'. By the fall of 1973, these countries had rccumulated $40.6 billion in international reserve assets compared to $10 billion in 1960. By the end of this year the international reserve assets of 'LDC's' may exceed $100 billion. These overall figures, however, mask wide divergence in performance. Oil-producing 'LDC's' are holding western economies at bay through massive price increases. Other LDC's also possessing important natural de- posits have been attempting to form their own producers' cartels to obtain a maximum rate of return on their resources. Those LDSC's without such strategic resources are facing financial collapse. The finance committee report gives recognition to the changing, role of the United States in the world economy and the deterioration of the U.S. balance of payments as follows : The Value of World Exports increased from $129.6 billion in 1960 to $575 billion in 1973. Normally, such a four-fold increase would suggest a growing world inter- dependence and a more efficient utilization of world resources. Unfortunately, however, much of the increasing volume of trade was attributable to inflation and occurred within preferential and discriminatory trading arrangements. For example, among the con- tracting parties to the general agreement on tariffs and trade (the GATT)-despite their pledge of nondiscrimination as a fundamental principle for achieving trade liberalization-the proportion of imports entering at preferential rates increased from ten percent in 1955 twenty-five percent in 1970, and the proportion will grow signif- icantly with the enlargement of the Euro- pean Community. One result of discriminatory trade prac- tices has been a decline in the U.S. share of world trade. While the value of free world exports more than quadrupled between 1960 and 1973, the U.S. share underwent a steady decline from 15.9 percent in 1960, to 14.6 percent in 1965, and to 12.4 percent in 1973.... The performance of the United States in the world economy throughout much of the postwar period has been marked by per- sistent trade and payments deficits . . . measured on the most accurate and mean- ingful basis, which would include the cost of insurance and freight in the value of our imports and exclude the soft-currency and .Approved For Release 2005/06/16 CIA-RDP79-00957A0001000200177-0 Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0 S 21284 CONGRESSIONAL RECORD-SENATE December 12, 1974 other Foreign-aid-financed shipments from the value of our exports, our trade account has been in deficit since 1966. In 1914, our trade deficit, measured an a C.I.F, basis, is running at an annual rate of almost $12 billion. These recent trade deficits have accounted for over one-half of our overall pyame to deficits.... Goverment expenditures abroad have also been a large contribtuor to the deficits in our international accounts. Between 1950 and 1973l Government expenditures for both mill y and economic aid caused a drain of $14 8 billion in our overall interna- tional accoux . which is about equal to the growth?n foreign country monetary reserve assets or this period." The report gocon to state: For many years ,is country relied on a trade surplus to offset foreign aid, military expenditures abroad,,,. as well as overseas private investment. Tht surplus, which was never large enough toset such expendi- tures, has now disappe`ed. In 1962, the nation had a modest trades of approxi- mately $1.1 billion (C.I.F.) d a balance of payments deficit of $2.9 b ion (liquidity basis). Ten years later the mo At trade sur- plus had become an $11 billioi :deficit, and the payments deficit had grown m a bear- able $2.9 billion to an intolerab 13.9 bil- lion. Not surprisingly, the dollar ha become unwelcome in many of the capit ylof the world and underwent a series of devalu Lions. In 1973 there was a temporary imp in U.S. payments and trade bales '' es (largely attributable to grain exports to e Soviet Union which many believe corgi, tributed importantly to the 8.8 percent infl a tion of 19'l3. Hopes for achieving a reason- able balance in our international accounts this year have been dashed by mounting deficits attributable to the increased costs of oil imports. In 1974, the United States will spend approximately $27 billion on oil imports; by the year's end, the nation's trade deficit (C.LF) will be well over $10 billion. Throughout the postwar years, the United States has, in effect, premised much of its trade, aid, and monetary policies upon a balance of trade surplus which, in fact, was diminishing and by 1966 had disappeared altogether. Mr. Pre :sident:, in the postwar years, the United States has been the only major country in the world whose share of world exports has decreased while its share of world imports has increased. In the space of a mere half dozen years-1964 to 1970-the U.S. share of world exports fell by more than 11 percent. while its share of imports rose by more than 17 percent. This unfavorable trade balance is espe- cially marked in manufacturing, the eco- nomic sector of most immediate and in- timate concern to American labor. The U.S. share of world exports of manufac- tured products has fallen from 27 per- cent in 1958, to 21 percent in 1970, to 19 percent in 1971; a decline of almost 30 percent in a dozen years. Few American-made items can with- stand the pressure. In the 1950's, only about 30 percent to 40 percent of the imports were comparable with U.S. prod- ucts. Now, about three-quarters of the imports compete with U.S. items, accord- ing to the U.S. Depart of Labor. In a number of industries there has been an absolute loss of jobs-fewer workers today than a few years ago. In women's apparel alone, the number of workers declined absolutely by more than 40,000 between 1956 and 1971. In elec- troni, a, there Was a loss of 109,000 jobs betw~'en 1966 and 1972, according to Labor Department figures. In shoe man- ufact?u?e, jobs declined from 233,000 to about; 200,000 in the past ii years. While the figures on job loss reveal part of the problem, they tend--by their impersonality-to conceal the human di- mensions of the tragedy. The people em- ployed in labor-intensive industries--t,rte hardest hit-tend to be drawn largely from the Nation.'s marginal populations: black. Hispanic, poor white. recent imm - grant., To these people, the labor-inten- sive industry-with its openings for urt- skilled and semiskilled labor--was the gateway to the economy. As these plants collar >e, the hors of these people col- lapse. The, Finance Committee report calls attention to the relationship between forelgti trade and domestic jobs as follov s: In recent years, the United States has e:- perien 'ed a series of trade and payments deficits, several dollar devaluations, and a rate of inflation unprecedented in peacetime. The Nation's economy has continued its long, slow drift away from labor intensive indus- tries, a.nd toward service industries. Especial- ly significant has been the shift in the struc- ture of U.S. employment . . . In 1960, nearly one-third of our U.S. nonagricultural em- ployment was in manufacturing. Since 1960, however, manufacturing employment has de- clined steadily to a position were barely one in four workers is gainfully employed in ,anu`acturing.... is cur Nation's employment in manu- balaW'e in manufacturing has declined abso- lutely'; In 1960 the United States had a trade surphi a to manufactured goods of $5.2 bil- lion. B y973 we had a deficit of $3.4 bil- lion. ?? n contrast, West Germany ai$o had a urpl of $5.9 billion in 1960, but by 1973 t hat sti lus had burgeoned to $28.7 billion man's modest surplus of $2.6 billion in 1960 aci exploded into a $23.3 bil- lion surplus by Mr. President, i addition to reviewing the dramatic cha es in the United State- and world ec omiei; since World War IF, calling attentl to the cleterior- ating U.S. balance of pa tints, and not- ing the relationship bb,ween foreign trade and domestic emp yment, the Finare'e Committee report d m:ents the dismol failure of recent oU ., foreign U.S. trade policy has not been . 1 2 1 for its coherence or consistency. Throe ?hout most ,r the postwar era, U.S. trade l icy has been the orphan of U.S. foreign poi Too often the executive has granted tra s concesr;ions to accomplish political objec-' tives. 'rather than conducting U.S. interna- tional economic relations on sound economic and ooiomercial pri:iciples, the executive has used trade and monetary policy in a foreign aid coe,text. An exe.mple has been the execu' tive's eanwilllngness to enforce U.S. trade statute-1 in response to foreign unfair trade practi .s. By pursuing a soft trade policy, by refusing to strike swiftly and surely at. foreign unfair trade practices, the executive has actually fostered the proliferation of bar- riers to international commerce. The result of this misguided policy has b, I een to permit and even to encourage discriminatory trading arrangements among trading nations. Thc report goes on to state : Twelae years have passed since the Con- gress enacted the Trade Expansion Act of 1962. A great amount of international eco?. nomic history has occurred in the inteven- ing years. In the opinion of the committee, much of that history has been unfavorable to this country, largely because of the anti- quated rules of the international trade and monetary systems and the related lack of genuine cooperation and reciprocity in in- ternational economic relations. The Kennedy round of trade negotiations brought about some of the largest tariff' reductions in the history of the United States. Unfortunately, the Kennedy round did not remedy fundamental inequities in the world trading system. There was no re-, form of the institutional structure, nor was there any significant progress in dealing with nontariff barriers or distortions of interna- tionaI trade. Our trading partners, most notably the European community, devised new ways to pursue protectionism, particu- larly in agriculture. Mr. President, despite this insightful analysis of the important changes in the world economy and of the role the United States plays in that economy, despite the worsening situation documented in the U.S. balance of payments, despite the relationship cited between U.S. foreign trade and jobs, and despite this lucid in- dictment of recent U.S. foreign trade policy and practice; the committee' re- port calls for enactment of the Trade Reform Act. Mr. President, I come to a different conclusion. I say it is time the United States based its foreign trade policies on the realities of the 1970's rather than the fictions of the 1960's. This bill does not represent a departure from past U.S. trade policies. It is merely a warmed-over version of U.S. policies during the 1960's. A warmed-over version of trade policies which did not achieve their goals during; the last decade, and certainly will not achieve their goals during the present decade. My colleague, Representative Jnafas Buxs;s of Massachusetts, accurately char-. acterized this bill and the U.S. trade sit- uation on,the floor of the House of Rep- resentatives on December 7, 1973, when he stated: This is not a bill for the seventies, but a patched-up version of the trade expansion act of 1962 and other statutes. The bill ig- nores the changes of the 1960's, when the, United States became a net importer of many manufactured products and parts of prod- ucts. The bill ignores the changes of the 1970's when the United States found itself with more imports than export,-a $6.4 bil- lion deficit in trade in 1972. In 1972, imports rose even more rapidly than in 1971-up 21.9 percent. In the first 6 months of 1973, im- ports shot up even faster, especially from the lowest wage countries of the world. Yet this fa used products. The United States sud- de finds it necessary to bid for raw mate- rials 1%V energy supplies. The kited States now imports the auto- mobiles, el, radios, and TV sets it once sent to the rest f the world. Shoe imports and textile and a>5laarel imports have been joined by inrushes inrushes o omputer parts, calculators, aircraft engines, d parts, as well as other product lines. This hange has eroded Amer- ica's industrial siren h and added costs to the economy in lost j and production of parts and whole produ in almost every kind of manufacturing, froii apparel to aero- space. These and other losses endanger serv- ice employment and the tax base of American communities and the American economy. Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0 Approved For Release 2005/06/16 CIA-RDP79-00957AO00100020017-0 december 12, 1974 CONGRESSIONAL RECORD -HOUSE They may be squatting all day in their Israel is vital for the security of that gs waiting in front of a government ra- small nation which faces such a tremen stoning shop. !dous burden in paying off debts in- There isn't enough food for everyone, so curred during the October war and re- ,the government divides evenly among them, building its defense establishment. As ;two pounds of wheat for each person every the committee points out in its report, 15 days. the United States can maximize its in- until dusk. There is nothing else to do. Arab nations which must join with Israel in negotiating a lasting settlement. the bill contains au- For that reason , MERITS AND DEFICIENCIES~OF THEFOREIGN ASSISTANCE ACT dan, thorizations along g for with a aid discretionary special The SPEAKER pro tempore. Under a requirement fund. previous order of the House,-the gentle- - It is important to note that none of man from Massachusetts (Mr. DRINAN) the funds authorized by this legislation is recognized for 10 minutes. are earmarked for the oil-producing na- Mr. DRINAN.,Mr. Speaker, it was with tions which have reaped an enormous reluctance that I joined with a narrow windfall at our expense during the past plurality of the House yesterday in sup- year. I am also gratified that the bill porting the final passage of H.R. 17234, prohibits the use of foreign aid funds the Foreign Assistance Act of 1974. While for the construction of nuclear power- I believe-that the American foreign aid plants in the Middle East in fulfillment program has, played'an important part of agreements negotiated by former in the preservation of world peace and in President Nixon earlier this year. I have 'NX - th ith er - many o the welfare of developing nations over previously joined w the past few decades, I have long been bers of Congress in expressing strong troubled by the amount of military aid disapproval of injecting nuclear tech- provided to governments which deprive nology into this volatile area of the their own citizen's of fundamental human world. On the whole, the Middle East `freedoms. Moreover, in recent years, the package appears to constitute a respon- executive branch has abused the foreign sible and constructive approach to our aid program by transferring funds ap- sincere efforts to bring a just and last- priated for worldwide economic and nu- ing peace to the Middle East. tritive assistance to supplement military HUMANITARIAN ASSISTANCE aid to South Vietnam and Cambodia. The Foreign Assistance Act contains These flaws cannot be ignored in evalu- an authorization of $470 million for food ating the overall impact of American and nutritive assistance vitally needed by foreign aid. the world's underdeveloped nations. In On balance, however, I believe that the addition, $150 million is authorized for merits of the Foreign Assistance Act en- population planning programs, crucial to acted yesterday outweigh its deficiencies. the formulation of a long-range solution This legislation, which authorizes ap- to the world food problem. As famine proximately $2.5 billion in economic and to threatens of Africa, to bring widespread starvation military aid for fiscal 1975, will enable parts United Latin America, and the United States to meet its commit- South Asia, the Unitted States must not imme- ment to bring a lasting peace to the Mid- largest its responsibility, producer, to as provithe de world's food prooducer, to die East and to help alleviate the food diate largest help. which imperil many of the AID TO AUTOCRATIC GOVERNMENTS A SERIOUS world's developing nations. Moreover, the DRAWBACK bill contains a number of important pro- The section of the bill which troubles visions which strengthen congressional the authorization of more control over the expenditure of foreign me than greatly lyl is is tha authorization more assistance funds by the executive branch. In countries under repressive, authoritarian composing this legislation, the For- rule. As a symbol of democracy and hu- eign Affairs Committee took the first liberty to much of the world, the tentative steps toward reducing military man United States should not be spending the aid to undemocratic, repressive govern- taxpayers' money to support dictator- ments. Finally, amendments added on ships in nations such as Brazil, Bolivia, the floor yesterday cutting off aid to Tunisia, Spain, the Philippines, South Turkey and reducing assistance to South Korea, Cambodia, and South Vietnam. Korea and Cambodia helped to meet my The Foreign Assistance Act passed yes- chief objections to the bill. terday did contain some important limi- THE MIDDLE EAST PACKAGE tations on aid to governments whose Probably the single most important domestic policies are inimical to our own. component of the Foreign Assistance The Foreign Affairs Committee elimi- Act is the so-called Middle East pack- nated nearly all proposed military aid age which authorizes slightly over $1 to Chile and placed a ceiling on military billion in military aid and security sup- aid to South Korea. Amendments adopt- port assistance for Israel, Egypt, and ed on the floor of the House placed a Jordan. In addition, a special require- more restrictive limit on authorized as- merit fund. of $100 million is established sistarice for South' Korea and a strict for use by the President at his discre- limit of $377 million on all aid to Cam tion, with the consent of Congress, In bodia. Although this level of assistance helping to bring peace to the Middle to Cambodia is still excessive, in my view, East. it is,only half of the amount requested by The $550 million in the bill authorized the administration. I was pleased to join for military'and economic assistance to with a large majority of my colleagues in II 11785 adopting -an amendment reaffirming our commitment to cut off all military aid to Turkey until that nation ceases its ag- gression on Cyprus. The House signalled its intention to move more decisively in the future against continued aid to repressive gov- ernments by. including a provision ex- pressing the sense of Congress "that, ex- cept in extraordinary circumstances, the President shall substantially reduce or terminate security assistance to any gov- ernment which engages in a consistent pattern of gross violations of interna- tionally recognized human rights...." I deeply hope that this verbal commitment will be translated into an intensive re- view of the domestic policies of our aid recipients with the aim of eliminating aid to those governments which refuse to re- spect fundamental human rights. IMPORTANT ASSERTION OF CONGRESSIONAL PRE- ROGATIVES IN FOREIGN AFFAIRS The provisions of this bill expanding congressional oversight of executive branch expenditures related to foreign assistance have great implications for the reassertion of proper congressional prerogatives in the field of foreign af- fairs. In fiscal 1974, the United States sold more than $5.9 billion in arms and military goods to foreign nations. These sales were arranged and sanctioned by the executive branch without so much as advance notice provided to Congress. Since the sale of arms has become an important component of American for- eign policy, it is vital that Congress, as the elected representatives of the peo- ple, have full knowledge of such sales along with the power to disapprove them. The Foreign Assistance Act passed yesterday requires the President to re- port major arms sales to Congress in a timely fashion and empowers Con- gress to veto such sales by concurrent resolution. The legislation prohibits the use of funds by the Central Intelligence Agency for activities in foreign coun- tries other than intelligence-gathering, unless the President certifies that an operation of another sort is important to the national security and describes the nature and scope. of that operation in writing to the appropriate committees of the Congress. Although I believe this provision is deficient in its failure to permit a congressional veto of a pro- posed CIA action in advance, it consti- tutes a significant step toward effective congressional oversight of the CIA. Finally, this legislation tightens up several loopholes in the Foreign Assist- ance Act of 1961 which have enabled the executive branch to circumvent the intent of Congress. Military goods cate- gorized as "excess" by the Defense De- partment can no longer be given away without limitation by the President at his discretion. Rather, the value of such goods must be calculated and counted against the amount of military aid for a designated country appropriated by Congress. In addition, the bill restricts the President's power to reallocate funds from economic to military aid and to transfer funds earmarked for one coun- try to a different country at his discre- tion. All of these provisions serve to Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0 H 11786 Approved.For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0 CONGRESSIONAL RECORD -- HOUSE December .12, 197f enhance congressional control of the foreign aid program. CONCLUSION The Foreign Assistance Act passed by the House yesterday is far from a per- fect piece of legislation. I remain deeply troubled over hundreds of millions of dollars which will help more than 30 tyrannical governments continue to sub- jugate their people. But I believe that the positive attributes of this legislation outweigh that serious drawback. More- over, the bill takes important steps toward reducing our support of govern- ments inimical to our own principles of free expression and self-government. Finally, the alternative to the new For- eign Assistance Act of 1974, a continuing resolution which would maintain all aid programs at their current levels, would contain fewer limitations on aid to Cam- bodia, South Korea, and Turkey, and would include none of the important re- form provisions of H.R. 17234 described above, For all of these reasons, I cast my vote in favor of the Foreign Assistance Act of 1974 on December 11, 1974. The SPEAKER (pro tempore). U r a previous order of the House, tll . en- tleman from Texas (Mr. GoN z) is Mr. GONZALEZ. Mr. eaker, come the stroke of midnig eccmber 31, the gold rush of 1974 will-begin, unless Con- gress changes the law with respect to private gold hoarding. The Treasury says that this is possible because gold has nothing to do with the monetary system any more. Maybe so. But the chairman of the Federal Reserve Board tells us that gold is still very much a part of the international monetary scene. The fact is that despite Secretary Simon's protestations to the contrary, the place of gold in the monetary world is still very much open to question. It might not be an active element-but it is still there, a question mark. The Treasury insists that selling off some of the Treasury gold stock will con- vince the world that gold is a useless relic, as far as money goes, and that in- deed, it is just another commodity. But he knows that this is not so. It will be a long time before the role of gold ends in monetary systems. It may be vestigial, like the human appendix-but it is there, nevertheless. And like the human ap- pendix gold can still cause the best laid plans to go astray. It is possible that contrary to Mr. Si- mon's belief, the Treasury gold sale wil not convince people that gold has noth- ing to do with money. It may have the opposite effect. And certainly the con- servative Swiss are in no hurry to open up their vaults and sell gold to the pub- lic--,nor the Germans, nor the Russians, nor the French. Not even South Africa, which is swimming in gold, is about to auction off any bullion. The truth of the matter is that Secre- tary Simon needs something to feed the gold bugs, and Treasury gold is about the only thing there is to do it with, without turning to foreign markets, which is something that we can ill afford to do these days. So ironically enough, the gold bugs will soon be munching away at what they like to think of as the Nation's monetary lifeblood. So be it. The Treasury will make a few hundred million dollars off the deal, and save our balance of payments a good amount of unfavorable treatment. But the truth is that the Treasury cannot sell vet' much of its gold-not because they would not like to-but because in truth, gold is still hanging around in the mone- tary system, and is not a surplus coln- motlity. Into this paradoxical world of gold will enter thousands of people who be- lieve in the religion of gold. And they will buy. The trouble is that many of them will buy in blind faith. You know, in the old days when gold coins circulated, people who accepted gold c ns would test them, to be sure that t coins were real. But in. the mod- ern t; d market, many innocent sheep will rget to bite their coins, and they wi ive to be sorry. haves in gold. But many of these huck- ster,s are going to be selling lead; many are 4 Ding to be selling 14 karat gold and calling it pure; and many are going to be selling old-fashioned hot air. All of this has happened already in. the coin market, which is deluged with counter- feit and fakes.And gold bullion is much easier to counterfeit or adulterate than coins ever were. The commissioner of corporations in the State of California has dealt with gold bugs and gold buggery as much as anyone else in the country. In his State, the -Din market, runs into the billions of doll irs. In that market, just about; every kind of fraud imaginable to the mind of man exists. There are simple problems like price gouging-and there are out- right criminal schemes. The California Commissioner of Cor- pore t ions knows the kind of dangers Ul at exist for the un's'ary in the gold market. He has investigated dozens of cases. And. he joins me in calling for a delay in the Legalization of private hoarding. Here is what he says : DEPARTMENT OF COR!'ORATIONC, Los Anrceies, Calif., December 4, 1974. Re: Gold Ownership. Hon. IENRY B. G`ONZALEZ, Representative from Texas, House Office Building, Washington, D.C. Ds:sR MR. GONzALEZ: I read with interest the newspaper article relating to your legis- lative efforts to delay the repeal of the gold ownership ban for six months. I ;;I, are your concern about ending the ban without prior adequate controls over the new gold market. The California Commodity Law became effective in September of 1973. This state leg- islation was adopted in an effort to control the sale of commodity options on unreg- ulated commodities, as well as, to require companies engaged in the sale of silver or gold coins, or silver bullion to become It- censed in California unless exempt. The ma- jor regulatory problems the Department has experienced under the state commodity law are problems relating to the sale of gold and silver coins and silver bullion. We have ex- perienced situations in which the sellers of precious metals purported to sell metals to market in a short position. We have had oth instances of dealers taking money far prese delivery of precious metals and then usirj never being able to perform their contract tual commitments. We have had numerous complaints relat- ing to abuses in the pricing mechanisms used` by dealers in selling coins and bullion where the .prices charged above spot were so hi_;h as to effectively inhibit any profit accruing to a customer absent a major shift in the price of the commodity. The scare tactics used by people in this industry in relation to promoting a depression syndrome, and discounting the stability of the United States currency has led to issuance of orders prohibiting misleading advertisting. We have received a large number of customers' com- plaints whose position on future delivery contracts was subsequently wiped out by margin calls where they were without ade- quate funds to meet those margin calls be- cause of overextending themselves. We have issued numbers of desist and refrain orders to companies who were operating in noncom- pliance with the state commodity law. There are, of course, significant considera- tions that a person should weigh before he decides to invest in precious metals, such as gold, in lieu of investments where there is interest income on their savings. The multitude of problems we have expe- rienced in the area of precious metals has .led to almost a constant revision of the regula- tions adopted under the California Co:.n- modity Law so as to effectively deal with the problems in the area and to attempt to give reasonable assurance as to the ability of sellers of precious metals to deliver the com- modity the customer has purchased. The danger to the investing public in ti is area is such that I believe that it is an ab- solute necessity to-have the power to regu- late this market effectively implemented prior to the time that public ownership of gold becomes a reality. Yours very truly, RoBER'r L. TOMS, Commissioner of Corporations. Mr. Speaker, we have a duty to do. We have a duty to protect innocent 1ple. We have a duty to protect our economy--- our economy does not need strains on its balance of payments; our economy does not need people taking out funds to put into useless gold schemes. We need to use our money to build up the coun- try's productive capacity, not to gamble away in a market 'that is controlled by foreign governments and a few shrewd big dealers. There is no need to rush into this gold business. We can wait, long enough to explore the problems, and deal with them now, rather than later. Congress has be n careless. Everybody will pay the price of that carelessness, unless we act to delay the legalization of private gold hoarding. DEFEAT OF TAX BILL BY . COMMITTEE ON RULES The SPEAKER pro tempore. Under a previous order of the House, the gentle- man from Illinois (Mr. MURPHY) is recognized for 5 minutes. Mr. MURPHY of Illinois. Mr. Speaker, as a Member of the House Rules Com- mittee I was deeply disappointed and shocked that the committee failed to re- port out the Energy Tax and Individual Relief Act, H.R. 17488. The committee voted 9 to 4 to defeat this tax bill because . Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0 F ( 3~1 RE~t t~R~~~9b ~f 4A1 Q Q,app 7-0 ecember gtpp"41 FOREIGN ASSISTANCE ACT OF 5974 Mr. HAMILTON. I yield to the gentle- -MON. LEE H. HAMILTON VF INDIANA man, I too would like to rise in opposi- tion to this amendment, and to remind my colleagues that India has about 600 million people. Its per capita income is about $100 or $102. The assistance, if it is to be provided- and I hope it will-is very modest for a country of that size. It is being used pri- marily for food and nutrition. If there is a likelihood of famine in any country, I would guess that it would be India. It seems to me that for humanitarian reasons alone it would be very wise to provide this assistance. I think also that the political relationship has improved yery definitely, and it would be a signal that we would like to continue on that Thursday, December 12, 1974 the House in Committee of the Whole Fuse on the State of the Union had under consideration the bill (H.R. 17234) to amend the Foreign Assistance Act of 1961, and for 4l7er ,purp oses. 'Mr. HAMILTON. Mr. Chairman, the amendment of the, gentleman from Iowa st ikes out air funds in the bill for India. The executive branch had recommended a figure of $75 million for India and the committee recommends $50 million. ,I ann rising in opposition to the amendment and I hope very much that the House will not see fit to cut out all funds for India. We have been laying the,groundwork for a more mature rela- tionshlp and, a new economic relation- ship with India in recent years. It would serve no useful purpose at this time to cut the limited number of dollars that we have in this bill for India. India is thelargest,and the most powerful nation in the subcontinent and also happens to be the largest democracy in the world. or the United States at this point to cut off all :aid to India would not affect India's nuclear program in any way and it would serve no real useful purpose. Beyond that, we lose any leverage that we might have with' India in trying to help her to restrain development of nuclear weapons. There has been no significant transfer 'of economic resources by India from domestic purposes to nuclear explosions. India has an overall budget of, about $60 billion and the total cost of the nuclear explosion was about $10 million. That is about one-tenth of 1 percent of India's I think a move by the Congress to cut off all aid to India would have an adverse effect on our relationship with India, and I strongly urge my colleagues to disapprove of this amendment. Mr. FINDLEY. Mr., Chairman, will the gentleman yield? Mr. HAMILTON. I yield to the gentle- man from Illinois. Mr. FINDLEY.. Mr. Chairman, I want to thank the gentleman for his com- ments. I share his view grid I hope the committee will support the emolument as Provided in the bill. India is not only the largest democracy in the world-that statement is an accurate one-but it also happens to be one of the few surviving democracies in that region of the world. I think, it would be a* serious mistake ,or, us to,lose the,leverage we do have,by moa S bT, this money and to turn our bacck on same very essential investments :that the taxpayers of this Nation have made in. India over the years. To close the door on communications by means .of this.3rogram at this juncture, I think, wolfed be very imprudent. C.IW'1 SEN. _Mr. Chair- t44, 111 the gentleman yield? The Prime Minister of India has made it very clear that her country needs this course. Mr. S Y MMS. Mr. Chairman, will the gentleman yield? Mr. HAMILTON. I.yield to the gentle- man from Idaho. Mr. SYMMS. Mr. Chairman, I would like to ask a question, The gentleman from Iowa who offered this amendment talked about saving cattle. Can the gen- tleman tell me the number of cattle in India? Mr. HAMILTON. I am afraid I cannot give the gentleman the number of cattle in India today. Mr. SYMMS. From the information I have, they have somewhere around 3D million head of cattle in India. We should try to make better utilization of those cattle. Do we have any inhibitions in that area? Mr. HAMILTON. No, we do not have inhibitions, but India does. This is a modest amount we are providing for India in the bill. It is only $50 million and it is directed. at precisely the right area of the Indian. economy, which is to in- crease food production. We cannot change their religious standards and mores. Mr. SYMMS. If the gentleman will yield further, I will say that in 'Indiana 1$50 million would be a modest amount, but in Iowa $50 million will go a long ways, and we do not have sacred cows, sacred monkeys, and sacred rats. Mr. HAMILTON. The United States has a strong interest in peace, stability, and economic development in the sub- continent. We have had enough experi- ence with the underdeveloped countries to know that whenever instability arises in any part of the world, the United States is brought into it. We are simply signaling India by these limited funds that we are interested in its problems and we want to help them out, and we stand with them in their desire for economic development. Mr. BUCHANAN. Mr. Chairman, will the gentleman yield? Mr. HAMILTON. I yield to the gentle- man from Alabama. Mr. BUCHANAN. Mr. Chairman, I thank the gentleman for yielding to me. I think. the gentleman from Indiana made a. good case against this amend- ment, and I would like to associate my- self with him. arrived in Moscow. the Americans spread out over the Approved For Release 2005/06/16: CIA-RDP79-00957A000100020017-0 E~ 7095 SON. EDWARD J. DERWINSKI - OF ILLINOIS IN THE HOUSE OF REPRESENTATIVES Thursday, December 12, 1974 Mr. DERWINSKI. Mr. Speaker, the perspective section of the Chicago Trib- une on Monday, December 9, carried an article entitled, "Mission of Mercy For- gotten," by Henry C. Wolfe, who served on the American Relief Administration mission to the Soviet Union in 1921. I believe this article to be totally ac- curate, objective and a historic summary which is extremely pertinent in light of today's international situation. I do not believe that we can actually think that detente with the Soviet Union has come about as a result of a sudden change of foreign policy goals. We face a great danger by being lulled into a false feeling of security to the propaganda use of-the so-called period of detente. Anyone who takes a good look at the situations in Cambodia, South Vietnam, South Korea, and the Middle East would have to wonder if Secretary Kissinger is inhabiting another glow as he flits about repeating the cliches of detente. The article follows: NONIIAPPENING IN RUssIA: MISSION OF MERCY FORGOTTEN Alexander Solzhenitsyn is a towering world figure, both as a writer and as a man. His courage and honesty are widely recognized. In "The Gulag Archipelago" he describes the catastrophic famine of 1921-22 as "such a famine as even Russia had never known before . . ." when "parents ate their own children. " He says nothing, however, about the American Relief Administration (ARA) that stopped the famine and ended the concomitant epidemics. Why did so honest and well-informed a man fail to mention the ARA? The probable answer is that he knows nothing about the ARA and its work. The Kremlin, he points out, gives the famine "only two lines in the official 'his- tories." Moreover,, he was an Infant when the ARA finished its mercy mission in Russia. Today, in all likelihood, only a few of the older Russians would remember the work of the ARA. It is probable that even fewer Americans do. Yet Sir Philip Gibbs, an on-the-spot ob- server, wrote of the ARA's work: "History will record it as the greatest campaign of relief and International charity ever at- tempted or achieved." This is the story. In 1921 the ARA was headed by Herbert Hoover, then secretary of Commerce. Since World War I, the organization, supported by large numbers of individual contributions, had been feeding millions of children in Europe. Its sole objective was to save lives and relieve suffering. Hoover's proffers of aid to Russian children had been rebuffed. On July 23, 1921, a dramatic call for help appeared in the world press. Maxim Gorky, speaking for the Soviet government, revealed the starvation that was rampant among the Russ! s. "I ask all honest European and alk, America people for prompt aid to the Rus- sian peo e. Send bread and medicine." That y Hoover cabled an offer of help, and q ly sent representatives to meet with a So delegation in Riga. An agreement I s /16 IA-RDP79 0 957, 001 0 E 7096 g t~~ Extensions o) mar s r 12, 1974 famine area, they found the dying and dead everywhere. Famished dogs foht over half- eaten corpses. There was canni lisxn. Hordes of panic-stricken peasants fled it doomed villages to die in the hungry c ies. With them traveled typhoid, cholera, sma ox, and in reaching the famine victims thk ARA encountered immense problems. The dr ded black-earth. Volga region where the famin was most devastating. At peak the ARA distributed daily food rations to 4,173,339 children and 6,317,958 adults. Additionally, the Russians received 1,300 complete surgical operating sets, 377 kinds of medicines, enormous quantities of soap, blankets, clothes, disinfectants, and cod-liver oil. Speaking at the Kremlin's farewell banquet given in July, 1923, for the ARA staff, Lev Kamenev paid tribute to the "utterly un- selfish efforts of the ARA." He declared that the ARA had saved millions of lives, "entire districts and even cities." The Russian people, he pledged, "will never forget the help given them by the American people." Stalin and his successors have made sure that the Russian people have never heard of that help. This experience may have a bearing on how much faith we can put In detente. IN OPPOSITION TO S. 1868, TO AMEj11D THE UNITED NATIONS PARTICIPATION ACT TO HALT THE IMPORTATION OF RHODE- SIAN CHROME HON. WILLIAM H. HUDNUT III OF INDIANA IN THE HOUSE OF REPRESENTATIVES Thursday, December 12, 1974 Mr. HUDNUT. Mr. Speaker, the bill, S. 1868, which would once again stop the importation of Rhodesian chrome into the United States, is on the House cal- endar and may be considered this week. I am strongly opposed to this legislation and hope it will be defeated. In these inflationary times there is no satisfactory reason for arbitrarily re- ducing the supply available to the U.S. consumer of an important industrial raw material-particularly since the main beneficiary of this act would be the So- viet Union. During the sanctions against Rhodesia the Soviet Union was our prin- cipal source of high quality chromite. It took advantage of our dependence upon it in two respects: First, the quality of the ore exported to the United States steadily deteriorated; and second, Rus- sian prices drastically increased. From $35.75 per short ton in 1965 the price steadily increased to $68.45 in 1972 and then fell back to $51.73 per ton in 1973 when sanctions were lifted. American consumers have a greater interest than ever in the continued avail- ability of chrome. For instance, in order to meet air quality standards, new auto- mobiles use catalytic converters made of stainless steel of which chrome is a basic ingredient. Rhodesia is a country which poses no threat-real or potential-to our security. On the other hand, the So- viet Union is a potential adversary. At the beginning of the Korean war, the Soviets cut off shipments of chrome to us. Obviously it is unwise to rely upon sources in the Soviet Union in any period of crisis. Therefore, from both an economic and security standpoint, the passage of S. 1868 would be very unwise. THE FOREIGN INFLUENCE AND OUR BOOKS HON. JOSEPH M. GAYDOS OF P]INNSYLVANIA V THE HOUSE OF REPRESENTATIVES ?,;Thursday, December 12, 1974 Mr: \nnwhich S. Mr. Speaker, the marked influethe book publisher has on thmind stems, as all those ac- quainthe business agree, from two sFirst, he selects the books, to be d, and second, he promotes It may be i lie interest of the Nation to keep these tiers in mind as we as- sess the latest 'or development iiin the book trade. It is t ' agreement by Amer- ican Financial C C. of Cincinnati to sell Bantam Books, c. to a Luxembourg holding company ociated with the mighty Fiat interest `.'n Western Eu- rope. The deal is to completed on Bantam happens to bee of the big- gest paperback publishers our coun- try, the source of millio9 f volumes which find their way onto wss-Lands, into homes and libraries,. and 1o school classrooms where they have a remen- This agreed upon sale, they fore, means that these millions of boo no natter what changes or lack of ch.a es I, as a Congressman, cannot let this happen without bringing to attention these facts, and, also, the danger to us as a nation which could me involved in them. The Bantam sale will turnover to the Western European owners an instru- ment of great force in the producing of the ongoing American public opinion. Can Bantam, therefore, be relied upon, under alien ownership, to pick and push books written exclusively in the U.S. in- terest? Will it lend its immense power to pro-American causes inimical to what may be the advantage held by its new overseas proprietors? What effect on once independent American thought may the Fiat people and the publishing decisions they dictate come to have in the years ahead? I consider these questions war- ranting our consideration,. I am aware of the internationalism which has prevailed for some time in the publishing business=how American- published books have wide distribution in Europe and, in fact, all over the world and how foreign. books are sold in trans- lation in large numbers here. But this certainly is a matter far different from that created by the Bantam sale, which has a foreign ownership moving directly into the American publishing industry, taking over a major source of informa- tion to the reading public. PROPOSES EXPANSION FOR MAILING PRIVILEGES OF MICHIGAN IN THE HOUSE OF REPRESENTATIVES Thursday, December 12, 1974 Mr. FORD. Mr. Speaker, I am intro- ducing legislation today to extend pre- ferred second-class postal rates to con- servation magazines published by State agencies. This legislation would merely extend the same mailing privileges to State conservation agencies which are presently available to other State agen- cies. Since postal legislation in this area was last considered by Congress, there has occured a dramatic surge of popular con- cern for and interest in the quality of the environment, conservation of fish and wildlife, and appreciation of our natural resources. These popular attitudes have been Teflected also in the significant in- crease of interest in outdoor recreation including hunting, fishing, backpacking, and. nature study. Forty-three State conservation agen- cies now publish magazines which reflect and nurture this interest. These publica- tions play a key role in educating citizens to the conservation ethic. Mr. Speaker, under existing law, State conservation magazines are mailed at the same rate utilized by commercial magazines. Unlike their commercial counterparts, however, these magazines are., almost without exception, published without the benefit of advertising reve- nue, and the burden of postage consti- tutes a drain on the fish and game fund which represents revenues available from hunter's and angler's license sales. In 1951 Congress extended preferred rates for certain second-class and third- class mail when mailed by qualified non- Fr lished by t a State." Again, in 1 definition of nization" to Congress amended the defini- All-my legislation proposes to do is to amend the definite of "qualified non- profit organization - to include "one con- servation publicati published by an agency of a State ich is responsible for management and onservation of the fish or wildlife resoures of such State." Mr. Speaker, the inr~ceased national interest in fish and wildife conservation is extremely gratifying.\, At the same time, however, it has genei~ated demands on State agencies to moilnt new pro- grams aimed at restoring threatened and endangered species as well as develop- ing conservation programs for nongame icultural, labor, veterans or fraternal anizations not organized for profit." the outset the Post Office Depart- interpreted this provision as not . Approved For Release 2005/06/16 : CIA-RDP79-00957A000100020017-0