had last year with the distinguished chairman of the Foreign Affairs Committee. The specific statements will be found on page 17360 of the Congressional Record, dated August 31, and I shall quote: Mr. MORGAN. Any requests submitted to the next Congress would be based on a carefully worked out program and would only be for such amounts as may be fully justified. Further, the chairman stated: Both the authorizing committees and the appropriation committees will have a look at the program next year, and, as I just said, every project must be justified. Quoting again from the same page: These programs of social development have not yet been worked out. Before the United States appropriates funds to assist in these programs, our representatives have told the Latin American governments that it will be necessary to have specific programs worked out and justified in detail, and, even more important, that these programs will have to be accompanied by basic legislation and institutional reforms in such matters as tax structure, land tenure, and legal procedure in order that new facilities provided under these programs may produce the benefits which are intended. Now, one final quotation: I think we have a responsibility. I can assure the gentlemen that next year, if the Democrats are in the majority and I head the Committee on Foreign Affairs, a detailed program for Latin America will have to be justified. I am sure this committee and the witnesses would want these terms met just as they were stated. CONSIDERATION BY HOUSE FOREIGN AFFAIRS COMMITTEE OF APPROPRIATION REQUEST PROGRAM I might ask at this point whether testimony has been presented to the House Foreign Affairs Committee justifying in detail each project presented to this committee, and as understood in the floor debate last year would be done? Mr. GORDON. Mr. Chairman. I have been working with Under Secretary Ball in the development of this program. We did have a meeting with the House Foreign Affairs Committee about 2 weeks ago. I have forgotten the date. Mr. PASSMAN. The full committee considered it? Mr. GORDON. It was formally a meeting of the Latin America Subcommittee, but there were present also about half of the other members of the Foreign Affairs Committee itself. Mr. PASSMAN. That presentation was in detail, in keeping with the understanding of last year on this program? Mr. GORDON. There was not presented at that time a detailed list of projects. What was presented was a preview of the sort of presentation which we will be making to your committee, and some discussion of it. Under Secretary Ball was present that day, as was Mr. Berle and I. We discussed with the Foreign Affairs Committee that day the statements in the report of the Foreign Affairs Committee last year concerning the opportunity they would have to look at this again and consider further legislation, and, as I understand it, there was no objection to our proceeding directly with the request for appropriation. Mr. PASSMAN. Of course, this subcommittee will have to have a reasonable explanation for the membership. Chairman Morgan's language was very specific and to the point. I quote from him again: Both the authorizing committees and the Appropriation Committees will have a look at the program next year, and, as I just said, every project must be justified. That detailed justification is yet to come; is that correct? INABILITY TO JUSTIFY PROJECTS IN DETAIL Mr. GORDON. I do not think that it would be possible, consistent with the kind of program this is, and the administrative arrangements proposed for it, to have the projects justified in detail before the appropriations are forthcoming. Mr. PASSMAN. Should we ignore this part of the agreement on the part of the chairman of the Foreign Affairs Committee? The chairman of the committee made a clear statement to the membership of the House. Mr. GORDON. This is what the committee said in its report, and this language we discussed with the committee on the day I spoke of: The committee has been assured that no requests for appropriation of any of the funds authorized will be made by the Executive until comprehensive programs for their use have been worked out. The subcommittee has been further assured that assistance from these funds will not be provided until the governments which are to be beneficiary have given evidence of their determination and ability to carry through the necessary institutional and legislative changes. The program for the use of the funds is what is before us today. The arrangements for administration, which are largely for administration by the Inter-American Development Bank, provides for the Bank not actually making loan commitments on individual projects until satisfactory evidence of the sort described by the House Foreign Affairs Committee has been forthcoming. Mr. PASSMAN. I think perhaps we have carried this discussion far enough; but I believe, however, that this is worth repeating: Mr. MORGAN. These programs of social development have not yet been worked out. Before the United States appropriates funds to assist in these programs, our representatives have told the Latin American governments that it will be necessary to have specific programs worked out and justified in detail, and, even more important, that these programs will have to be accompanied by basic legislation and institutional reforms in such matters as tax structure, land tenure, and legal procedure in order that new facilities provided under these programs may produce the benefits which are intended. And further: Mr. MORGAN on page 17361 of the Congressional Record for August 31, 1961— It is an overall long-range program. I can assure the gentleman that the $500 million will not be spent for several years. As I said previously, every dollar will have to be justified. Mr. GORDON. For the actual expenditure, that is so. Mr. PASSMAN. We understood that this appropriation should be forthcoming within a matter of hours. If the expenditure is going to be over several years, perhaps we could have a little more time to deliberate. Mr. GORDON. May I distinguish between the problem of negotiating the commitment of the funds and the actual expenditures? As many of the projects described in the book suggest, they may be 5-year programs, or 7-year programs, and indeed a number are. The expenditures would obviously take place over that time. By the nature of the long-range program, they cannot be properly planned unless one is sure at the beginning the total amount is given. Mr. PASSMAN. All out of the $500 million? Mr. GORDON. Yes. PLANS FOR A NEW FOREIGN AID PROGRAM Mr. PASSMAN. I read in the newspapers this morning that President Kennedy will request a major aid overhaul. I am quoting the first paragraph of a news report: President Kennedy will send to Congress Tuesday plans for a major overhaul of the foreign aid program, including a 5-year $7 billion development fund and bonuses for countries that adopt democratic social reforms. Do you have any bonus arrangement in this request for countries which adopt "democratic social reforms?" Mr. GORDON. I have never used the word "bonus" myself. Mr. BOWLES. The President's message has not been crystallized yet. Mr. PASSMAN. I am only quoting what are supposed to be the President's intentions. Of course, if the President did not indicate that, I am sure at the proper time he will say he did not offer bonuses. But the news report says: Bonuses for countries that adopt democratic social reforms. I can understand there could be some word substituted for "bonuses," but "countries that adopt democratic social reforms," I wonder if you can clear that up? Mr. GORDON. I do not think that is a correct description. I think you will find the actual intent described in the President's message which is still being worked out. Mr. PASSMAN. I think it is not inappropriate to have this comment in the record at this point: A few evenings ago, I drove downtown and had a congenial taxicab driver who wished to engage in conversation, and I was accommodating. We passed a mission. There were about 40 or 50 men standing out there, poorly dressed, and I asked, "What is this?" And he said, "A mission. They have services there each evening, and each one of these individuals who go in, and confess their sins and agree that they are going to try to reform, they get a hot meal and a bed for the night. But, in most instances, the same people are back to confess and accept salvation the following evening." I wonder if we might not be getting into such a situation as that? I wonder if these people might not be somewhat like those going to the mission. Mr. GORDON. I do not know what the President's message will say, but I assure you, so far as our thinking on this program is concerned, the idea of reward for good behavior is furthest from our thoughts. What we are talking about here is outside resources essential to make these kinds of activities work, and not just rewards for good behavior. We do not regard Mr. PASSMAN. I did not use the word "behavior." I was quoting what were supposed to be the President's intentions: *** Will send to Congress Tuesday plans for a major overhaul of the foreign aid program, including a 5-year $7 billion development fund and bonuses for countries that adopt democratic social reforms. Mr. GORDON. I think the reporter is badly informed. Mr. BOWLES. May I see that? Mr. PASSMAN. That is a wire service report from UPI. Mr. BOWLES. That is known as a leak. That is not quite accurate. Mr. PASSMAN. I hope the President corrects it, then, before we get too far along in this committee. Secretary Dillon, we shall be pleased to hear from you at this time. Mr. BOWLES. Mr. Chairman, we have here three statements, one of which leads to another. What we would prefer to do, if you feel it is proper, is to read those through to give you the integrated three views, and then you can ask questions. I will read mine first and Mr. Dillon's will follow after mine. Mr. PASSMAN. We do not want to be deprived of the opportunity of asking Mr. Dillon some questions. You may proceed. GENERAL STATEMENT OF UNDER SECRETARY BOWLES Mr. BowLES. Last Monday evening President Kennedy enunciated his proposals for an "alliance for progress" with our neighbors in Latin America. A major element of these proposals and an essential first step is the inter-American program for social progress. The Congress last September authorized for this program an appropriation of $500 million. The President sent to the Congress on March 14 a message asking that the authorized funds be now appropriated as a matter of urgency. Mr. Dillon will place this program in the perspective of the Conference of Bogotá last September-where he led the U.S. delegationand will discuss with you the Inter-American Development Bank, which is expected to play a key role in the program. Mr. Dillon is now the U.S. member of the Bank's Board of Governors. Under Secretary for Economic Affairs Ball, who had planned to join in this presentation, is presently in Europe discussing with our friends and allies there the need for greater participation by them in the common effort to accelerate economic growth in the underdeveloped free countries of the world. Mr. Gordon, who has been working with him in the preparation. of this program, will present the statement Mr. Ball had planned to make, outlining the plans developed since the Bogotá Conference for administration of the problem and the types of proposals and projects. which will be eligible for assistance from these funds. There is also before you the President's request for an appropriation of $100 million for Chilean rehabilitation and reconstruction, pursuant to the special authority provided in the same act of Congress pursuant to President Eisenhower's request last summer. Mr. Mann, the Assistant Secretary of State for Inter-American Affairs, will speak to that program, together with Mr. Labouisse, the Director of the International Cooperation Administration. I will say at this point only that it is important to our interest in the success of the Chilean people in completing their recovery from last year's devastating earthquake that these funds be made available to them promptly. Mr. Chairman, I need hardly emphasize to you the vital importance to the United States of a Latin America which is independent of alien influence, and growing in strength and self-confidence. The natural relationship of the nations of the hemisphere is one of mutual understanding and cooperation in common endeavors, We are bound together by the ties of our origins in political revolution from Old World empires, our heritage of European civilization and values, and our economic interdependence. A firm and fruitful partnership, however, requires strength in the social and economic foundations of all its members a strength responsive to the awakened aspirations of the masses of mankind which characterize our period of world history. In much of Latin America today, despite the vast human and material resources of the region, those foundations are not sufficiently strong. The Soviets and their allies have left no room for doubt that they regard the Latin American nations as vulnerable targets for Communist infiltration, subversion, and ultimate capture. It is for us to demonstrate that a true partnership of free nations can provide more fully and more durably for man's basic material needs and highest spiritual aspirations. The alliance for progress is conceived as a sustained and systematic cooperative endeavor to come to grips with these deficiencies. ORIGIN OF THE PROGRAM For many This program has not been conceived in a vacuum. years, the problems of Latin American economic and social development have been closely studied by national, regional, and international agencies working in the American Republics, and by U.S. officials, foundations, and private citizens. Special studies made by Members of Congress and commissioned by congressional committees have helped to lay a firm foundation for a new concerted effort. These studies and reports show a remarkable degree of consensus. concerning the basic nature of the problem. While there has been marked progress in Latin America in certain fields of industry, urban commercial and financial institutions, mining, and plantation agriculture for export, many millions of the populations have not shared in this development. Illiteracy, desperate poverty, ill health and malnutrition, and appalling housing conditions are widespread, especially in the countryside. Rapid population growth aggravates these evils. This imbalance in development results from structures of social institutionsespecially systems of land tenure, taxation, and education-which are not in keeping with the needs or the possibilities of the 20th century. There is no simple and uniform pattern. In some countries a substantial middle class has emerged and in almost all there are new political forces pressing for constructive social and economic change. |